Risks of Adding Your Kids to the Title or Deed to Your Home
One of the questions that estate planning attorneys often get is whether it’s a good idea to put your adult children on the title or deed to your home for estate planning purposes. This is a good question and one that is fraught with risks and concerns.
The idea is this, if you add an adult child on the title or deed to your home, it allows the property to bypass probate and transfer directly to the child when you die. While this may be true in many cases, it comes with many potential problems that you may not be aware of.
The Perils of Adding Your Adult Children to the Title or Deed to Your Home
When you add a child to the title or deed to your home, they become a joint owner of the property. But, moving an asset into joint ownership with your children is most often not good estate planning. Here are some of the reasons why:
1. When you add your child to the title or deed to your home to create rights of survivorship, they will receive an equal right to control and possess the property. Therefore, if any dispute arises between you and your child regarding what should or should not be done with the home, you will have no more authority to dictate the outcome than they have.
For example, if you were to decide to sell the home, it may not sit well with your child, whose desire may be to protect their future inheritance. These kinds of disagreements often result in family members battling it out in court.
2. When you add your child to the title or deed, the home (for which the child is now an owner) may become subject to his or her creditors. Now, instead of being secure in the home that you have spent many years paying for, there is always the risk that it can be lost if your child gets into financial trouble, or has a large judgment against them.
3. Depending on how and when you transfer ownership of the home to your child, it may be seen as an impermissible transfer if and when you need to apply for Medicaid to pay for nursing home care. This will make you ineligible for Medicaid for some period of time. And as a result, you may have to spend down a good portion of your hard-earned assets on nursing home care before you are eligible to receive Medicaid benefits.
4. When you die owning the home with your child as joint tenants with rights of survivorship, the home becomes fully owned by the child. This means that ownership of the home won’t be shared with any other person, even if you had intended for it to be shared.
Of course, the child might decide to share ownership with his or her siblings. But he or she could just keep it all for his or herself, since as the surviving owner, the home belongs to them 100%.
Consult with an Experienced Virginia Estate Planning Attorney
As you can see from above, adding your child’s name to the title or deed to your home may, among other things, unintentionally disinherit other family members and put your assets at greater risk of loss. Thus, it should not be considered a good way to ensure the smooth transfer of your home after you pass away.
Working with a qualified professional to put an estate plan in place that is customized to your needs and desires is the only good solution. Once you consult with an estate planning attorney, you are sure to find that estate planning is easier and less expensive than you think.
For more information regarding this or other estate planning issues, contact our law firm at (703) 553-2577 or use the contact form on our website to schedule a consultation with an experienced Virginia estate planning attorney.
The information on this site is for general informational purposes only. The information presented in this site is not legal advice or a legal opinion. You should seek the advice of legal counsel of your choice before acting upon any of the information in this site.