I want to add a child to my property. How do I do that?
Very often, parents desire to add their children to title on their house. The thought process (usually) is that it will keep the house out of probate and will allow for an ease of transfer where they want the child (or children) to receive the house when they die anyway.
This is a valid consideration. Any property that goes through the probate process can be attached by unsecured creditors, who can potentially force the sale of the property to satisfy those claims. The probate process can also delay the transfer of title until the claim period (typically six months from the date of death) ends.
However, there are multiple ways in which multiple people can hold title to real property and pass real property to heirs outside of the probate process. There is joint tenancy. There is a life estate without powers. There is a life estate with powers. All of these various methods have different implications in terms of the rights the parents retain in the home, and in some cases, their ability to “undo” the transfer. They all have differing tax implications as well, most notably as is pertains to capital gains.
There can be various reasons that families would prefer one method over another, but it is prudent to consult with a real estate or estate planning attorney to determine which is best for you. Thankfully, at Hillman, Brown and Darrow, we have several of those ready to assist you.
Posted in: HBD Law News