anyone have any sage advice of the pros and cons for turning homeownership over to a child? Considering this to avoid probate in the future. Thanks in advance. Jacque
I'd like to know also the man on my corner told me he did this and it relieved everyone's mind
My advice is not to do it. Have seen too many people in trouble when their children had financial problems or decided parents had to live elsewhere. Better to do a transfer on death than a complete turn over.
Although it would be nice to give your children your home you and anyone considering do so should review all of the options. If the children live in the same town but a smaller not as nice home they might move into it. Most will sell it just so they do not have to bother with it. Are you really transferring the house or just wanting to give them money when you are gone? The idea of keeping "mom's house" is for many just wishful thinking. If you are wanting to give them money just sell the house and give each the maximum that can be distributed with out gift taxes having to be paid. Either way can lead to you not having a secure place to live. You also need to ask your children if they would prefer that money be spent on your care or an inheritance. Be prepared for a heavy discussion.
What we did in CA with our folks, was all four names were on the deed. Then when my folks passed away, it automatically became ours, no inheritance taxes. etc But we did have it recorded in out names and reappraised. That paid off when we sold it. But it went thru a lawyer.
Now here my DD and SIL are also on the property and it will automatically go to them. But again we went thru a lawyer when we bought it.
Thanks to both for your answers. I have looked up on the net and the consensus is that this can be a lot of problems. I would definitely go through a lawyer. Another avenue I am looking into is putting the house in trust. I have just been forced to retire and really have no desires to relocate or move. I would like to stay in the house as long as able.BUT....anything can happen and I would not want the house taken for nursing home, or should I just drop......probate. I sound very greedy, when I put it down on paper, but I am really trying to make the correct move for all involved. Everything I have is divided among my three children, except for my home. Have gone on to a leased car and all bills automatically paid monthly. I am trying to become educated as to handle this last "piece of business" properly. Thank you all for your input! Jacque
We did what mariend did. My dad had passed away, mom held the house in her name. My 2 sisters and I were all added to the deed.
My mom ultimately had to move into nursing home where she lived for a long time as a private pay patient. Part of the funds that ultimately were used to pay for her care came from the proceeds gained on the sale of the house.
My sisters and I had an agreement, developed quite a few years earlier, that 2 oout of 3 was a majority and that the 1 had no rights of appeal if outvoted. That worked very well in our family...my sisters and I get along.
I would not recommend deeding the house to your children. You might need the funds to pay for health care in the future.
Some people turn over the house to their heirs and then expect the taxpayers to pay for their care. That isn't fair or ethical. Not that you are trying to do that, just that some do.
There are several reasons not to put your childrens name on your house. First of all, if they caused an accident and were to be sued, then the house could be taken in judgment. If they are married and then divorced, then their spouse could claim a portion of the house as an asset in the divorce settlement.
There could also be tax ramifications. Suppose you bought your house 30 years ago for $50,000. It is now worth $200,000. If the house is left to your children in a will or trust, then if the house is sold, they get the stepped up value of the house tax free. Now, if you add your child's name to the deed, then when you die they could have to pay taxes on the difference between the cost of the house and the selling price. In the above example, $150,000.
I would never add anyone's name to a deed just for the liability issues. It is not worth the risk. Talk to a good estate attorney. Probate is just not that big of a deal.
It is not safe to put any child's name on the deed nor on a saving's account. If they are sued the money can be taken or your child can take if they get mad enough at you. Put TOD on property and POD on accounts. All they will need is a death certificate to take it over. I had that confirmed by an estate lawyer. Your state may be different, but I doubt it.
Probate is not a big deal, but the attorney's you have to hire are. My brother in law lost 60% of an inheritance an aunt left him to attorneys.