One of the challenges facing aging parents is deciding how best to deal with assets that their children may need to manage should they become seriously ill or incapacitated. Many parents who plan to leave their homes to their children when they die wonder if it is a good idea to add their children’s names to the deed of their home while they are still living.
There are advantages and disadvantages to this approach.
Advantage of putting your child’s name on the deed
Because adding your children’s name to the deed makes them part owner of your home, you can avoid the probate process by doing so.
Disadvantages of putting your child’s name on the deed
Because your child has part ownership of your home, if you add them to the deed, creditors can go after the child’s share of the value in the home if they win a lawsuit. Additionally, if your child were to incur a large liability due to an automobile accident or other type of negligence suit, the other party could file a claim against your child’s share in your property. If your child has a spouse and the marriage dissolves, your child’s spouse could make a claim on your child’s share of your home’s value. Additionally, your child may lose the tax benefits that come with inheriting a home under California law.
Because there are other ways to avoid probate and there are numerous potential disadvantages of putting your child’s name on the deed, it may be better to consider other methods of transferring your home to your child.