One of the most popular driving factors behind Americans going through the estate planning process is helping their heirs skip probate. Avoiding probate is beneficial for many reasons, and chief among them is that probate can take a lot of time and be expensive.
In order to avoid probate, some older Americans are considering putting their adult child on the deed to their primary residence. However, this almost always causes more problems than it solves. According to InCharge Debt Solutions, putting your adult child name on the deed to your home means that you could face consequences as a result of your adult child’s financial dealings.
How does doing this help avoid probate?
Putting the name of another person on the deed to your home means that you then own that property in joint tenancy with that other person. This means that if one of you dies before the other, the property automatically becomes the possession of the surviving owner. This happens without the property going through probate.
What are the downsides?
There is no legal delineation between being the “first” or “second” owner of the property. The moment that you put your adult child’s name on the deed, the house becomes their property in full, just as much as it is yours. This means that if your adult child owes the IRS taxes, the IRS may then put a lien against your property if it is in your adult child’s name.
Furthermore, if your adult child gets married or divorced, that also causes problems. A better way to help your heirs avoid probate is to put your home in a revocable trust.