If you’re thinking about adding your kids to the deed to your home, this blog will tell you all the reasons why that is NOT a good idea.
Risks of Adding Children to Your Home Deed
But first – why do people want to add their children to the title to their home? One main reason is that their home is their most valuable asset and they want to avoid the probate process. Another is that they think it’s going to make it easier for their kids to take over their property after they pass away.
But adding your kids to the deed to your home can carry a lot of risks and cause unintended, unfortunate consequences.
Here are some reasons why adding your children to the deed to your home is not a good idea.
- By adding them to title, you are giving them legal property rights in your home. You are making them an owner, and you will need their consent and signature in the future if you want to sell, refinance, or mortgage your property. If they ever wanted to go to court and force the sale of the house, they can do that!
- This could also be a problem if you’re on Medicaid or you anticipate applying in the future, because adding your child to the deed can cause you to become ineligible for Medicaid.
- You’re also subjecting your property to your kids’ creditors. So if they get in an accident or they get sued, or they have judgments against them, you’re now making your home vulnerable to your child’s creditors.
- You may also be creating a significant capital gains tax bill for them if your property has appreciated in value since you bought it and you now make them present owners, as opposed to leaving them the property on your death. If you add them to title now, they will not be able to avail themselves of what’s called a step up in basis for tax purposes.
Explore Safer Ways to Leave Your Home to Your Kids
There are other, much better and safer options when it comes to leaving real estate to your kids, for example putting your home into a revocable trust, or doing an enhanced life estate deed for your property.
Make passing on your legacy easier. Contact SJF Law Group today to discuss personalized estate planning strategies that avoid probate and benefit your children.
Talk to Our Estate Planning Attorneys
Don’t leave your legacy to chance. Secure your family’s future with personalized estate planning.
Contact SJF Law Group today to discuss strategies that minimize probate and ensure a smooth inheritance for your children. With our experienced estate planning attorneys, you get more than just a plan – you gain peace of mind.
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