One of the main goals of comprehensive estate planning is to avoid probate as much as possible. Probate is not only a very public mechanism, but it can also be expensive and take a long time.
Some people think that putting their adult child’s name on the deed to their home is a good way to help their heirs avoid probate. However, this is almost never a good idea according to InCharge Debt Solutions.
Why is this not a good solution?
Putting your adult child on the deed to your home makes them an automatic owner of the property and gives them the exact same status as you.This means that if you want to sell the home or take out a home equity loan, you will need the permission of your adult child to do so.
Even if you do not foresee this being a problem, there are other risks to putting somebody else on your deed. For instance, if your adult child is delinquent on taxes, it is possible that the IRS will put a lien on your home if your child’s name is on your deed. If your child marries and divorces, it is possible that your child’s ex-spouse will have a legal claim to your home if the court considers the home as marital property.
What is a better idea?
The best way to pass property down and skip probate is to put your home into a trust.Then, the home becomes the property of the trust, and you can name your adult child as a beneficiary. In this way, the property will pass down to your child without probate, but your adult child does not become an owner of your property until after your death.