Here’s why listing your child on a property deed may not be the best idea

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CONTRIBUTED CONTENT — Should you list your child as a joint tenant with you on your home? It is true that if your child survives you as a joint tenant on your home, your home will not have to be probated. At your death, your child would immediately become the sole owner of your home without probate and with minimal transfer costs.

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Although owning property as a joint tenant with a child is probably the simplest method of transferring a home at your death, there are risks and traps for owning your home with a child as a joint tenant. Below are some of the disadvantages.

A creditor of your child may try to seize the home because your child’s name is on your home as an owner. If your child is sued or files for bankruptcy, your home will appear as an asset that’s on the hook to satisfy claims against him or her.

Once your child’s name is on the deed to your home, you can only sell or refinance your home if your child cooperates with you and signs the necessary paperwork. So you have surrendered control of the use of your home unless your child approves of what you want to do. Your child can effectively cancel your own decision to deal with your home as you want.  

If your child survives you and you have other children too, the child on the deed to the home may claim that you gave the house to him or her alone and not to your other children. Since that child is the only one named on the deed, your other children will have an uphill – and sometimes impossible – battle to clear the title.  

If you name all of your children as joint tenants with you on the deed, only your surviving children will share in the home after your death. If any child dies before you, his or her interest in the home will be gone. No interest in the home would trickle down to that deceased child’s children. In addition, you would have exposed your home to creditors, lawsuits and claims against all your children, not just one.

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If you and your child were to die in a common accident, special problems arise. Finding out whether you or your child died first will determine who is entitled to your home. If you lived longer than your child, you will be the surviving joint tenant and your “estate” would own the house. In that case, your house would be given to your heirs.

If the joint tenant child lived longer than you, his or her estate would own the house, and his or her spouse and children would be entitled to your home – not your heirs. If it can’t be determined who died first, the likely result would be that half of your home’s value would be included in your estate and passed to your children, and the other half would pass to your child’s spouse or children. 

A costly and time-consuming lawsuit may be required to fix any of the problems listed above. Usually, such a lawsuit attempts to establish that you placed your child on the deed to your home for convenience only – that is, to avoid probate. Avoiding probate is not worth the cost and family tension that would be created if any one or more of these scenarios took place.

Unless you have truly exceptional circumstances and have discussed your situation with an experienced estate planning attorney, you should leave your home in your name only.  With a valid will and a simple probate procedure – or better yet, a properly prepared trust – you can keep control of your home during your lifetime and ensure that your house is disposed of as you truly intend at your death. 

Sean Sullivan, Andrew McCullough, Shelbi Post and Amy Nicholls are part of the estate planning team at the firm Brindley Sullivan, PLLC. Call 435-673-9220 to arrange a free consultation to discuss your estate planning needs.

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Resources

  • Brindley Sullivan | Address: 50 E. 100 South Suite 302, St. George | Telephone: 435-673-9220 | Website.

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