Should my dad include a child on the deed to avoid a lengthy probate? 14 Answers as of November 23, 2011

My dad owns a house and 6 acres and has 5 children. He was told he should include a child on the deed to avoid lengthy probate, is this okay, and how is it done?

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Minor, Bandonis and Haggerty, P.C.
Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
No. You can't "include a child on a deed." A deed transfers an interest in property you are giving away a part of the property. This makes the property subject to any judgment against Child, makes it an asset in Child's divorce, makes it subject to Child's tax obligations. Property should be owned by the people who own it, and not transferred around the family like snickerdoodles. Then, which child? Because the others then won't inherit anything. That's a tough choice. On the other hand, probate is not difficult or expensive in Oregon, and it writes a final chapter to the decedent's affairs and closes the books. Probate is a good thing.
Answer Applies to: Oregon
Replied: 11/23/2011
THE BROOME LAW FIRM, LLC
THE BROOME LAW FIRM, LLC | Barry D. Broome
Upon your father's death the child alone would own the property and would NOT have to share. Further, if the child is a minor the sale of the property could not occur until the child became an adult without court approval. If he put all children and all children were adults then it would avoid probate with no time delays.
Answer Applies to: Georgia
Replied: 11/19/2011
Donaldson Stewart, PC
Donaldson Stewart, PC | Monica H. Donaldson Stewart
There are ways to avoid the probate process, but putting one child on a deed (when there are several children) is not recommended. Your father may want to consider creating a Living Trust and then transferring the property to that trust. When a Living Trust is properly funded, it can avoid the probate process entirely, and still allow him the ability to direct the manner in which he wants his assets distributed upon his death.
Answer Applies to: Arizona
Replied: 11/18/2011
Charles M. Schiff, Attorney at Law
Charles M. Schiff, Attorney at Law | Charles M. Schiff
The technique you describe has some potential drawbacks. Your dad would have to trust the chosen child to do what your father wants done. At your father's death, the property would belong to the named child. It is also possible that the child named could have marital problems or creditor problems after an interest in the property is transferred to him. This could result in loss of property and/or delays equaling those involved in Probate. There are other possible techniques including a living trust or a Transfer On Death Deed (TODD).
Answer Applies to: Minnesota
Replied: 11/18/2011
Martinson & Beason, PC
Martinson & Beason, PC | Douglas C Martinson II
If he does that, the property will go only to that child and would be subject to that child's creditors, judgments, wife in divorce, etc. If something happens to the son before he transfers it to the other children, the property will pass according to that child's estate. Probate is a 6 month process and is not very expensive (about $1500-2500) as other states. So if your father wants to make sure the property goes to all children, he should have a will or a Revocable Living Trust (and transfer the land to the trust).
Answer Applies to: Alabama
Replied: 11/18/2011
    The Law Offices of Laurie E. Ohall, P.A.
    The Law Offices of Laurie E. Ohall, P.A. | Laurie E. Ohall
    I almost never have a parent add a child to a deed for several reasons. First, if the child ever has creditor issues (causes an accident and gets sued, goes through a divorce, credit cards), that asset will be considered to be 50% the child's asset, and the parent could lose half of their property. Secondly, in Florida, we have homestead exemption rights - if that property is the parent's homestead, but not the child's, the parent could lose some of the homestead tax exemptions. Third, in your situation where there are five children, and only one is added to the deed, upon the death of the parent, that property will legally belong to the one child, not the other four. If the one child has a falling out with the others, they could be out of luck (and don't say, "oh, that will never happen to us" - you'd be amazed at how often it happens). Also, there could be gift tax implications in the child gifting interests back to the other four siblings. An inexpensive way to avoid probate and make sure that all of your siblings receive an interest in the property (if that is what your parent desires) is to do an enhanced life estate deed where the parent retains a life estate (and the right to sell, mortgage, rent, or do whatever the parent wants with the property). At the parent's death, whatever interest he/she owns goes to the remainder beneficiaries (and all 5 children can be listed). There may be some downside to doing this type of deed, but this is something your parent should speak to an elder law attorney about. And, an attorney should prepare the deed (if you want to make sure it is done correctly).
    Answer Applies to: Florida
    Replied: 11/18/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    There are some pros and cons to this and it needs to be drafted by a lawyer. It involves some decisionmaking as to gift taxes, life estates, joint tenancies, etc., so there are options and choices that will need to be addressed.
    Answer Applies to: Georgia
    Replied: 11/18/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    If he does, there are two problems. First, if there are five children and he puts only one on, when he dies, only that child will be the owner and the other 4 will not. Second, when he dies, the child takes the property with Dad's tax basis, which is generally the amount he paid for it. When it is sold in the future, the tax liability is the difference between the amount paid by Dad and the amount it is sold for. He should instead have a trust created to give the property away at his death to everyone he wants to have it. A trust avoid probate and the tax basis is the value at his death. To illustrate, say he bought it in 1970 for $50,000 and when he dies, it is worth $500,000. The child decides to sell it immediately after death. If the child just goes on title, the tax is based on the difference between the $500,000 sale price and the $50,000 it was bought for in 1970, or $450,000. If it went through a trust instead, the tax is 0 as the tax is computed on the value at his death, $500,000 and the amount sold for of $500,000.
    Answer Applies to: California
    Replied: 11/18/2011
    Law Offices of Brian Chew
    Law Offices of Brian Chew | Brian Chew
    While putting a child on title of real property can help avoid probate, it may have significant negative tax consequences on both the child who receives property and the other children. A living trust is the most effective method for transferring property to your children upon your passing. You will avoid probate and give your children the most favorable tax treatment.
    Answer Applies to: California
    Replied: 11/18/2011
    Harville-Stein Law Offices, LLC
    Harville-Stein Law Offices, LLC | Dean D. Stein
    Certain problems can arise from putting an adultchild on a deed. Oneof the most concerning, is the way the question was worded, it seems like he would put "one" of hisfive children, not all. That could create obvious problems of that child not later deeding to the others "their" share, or that child subsequently dying and his/her family having claim to the property. Also, depending on how it is done, it may impact your dad's ability to qualify for Medicaid if needed, or even create a current gift to the child(ren) whose name(s) are on the deed. You need to consult an attorney to fully explore all the issues before you have your father make this decision.
    Answer Applies to: Alabama
    Replied: 11/18/2011
    Goldsmith & Guymon
    Goldsmith & Guymon | Dara Goldsmith
    It is generally not a good idea to put another on title as it may negatively impact your homestead, availability to qualify for governmental assistance and if they have financial issues, you could lose the property. That being said the children may be named as pay on death beneficiaries. However, when children (more than 1 own property together) difficulties arise, as such, sometimes it is less costly to have the property go through probate and sold in the probate. Alternatively, a trust may be the answer. Your father should speak to an estate planning attorney about his options. We offer a one hour consultation with an attorney who will provide you with important information regarding your specific case and will able to advise you on the options that you should consider in determining your next steps for the small investment of $100. This is a significant discount from our billing rates.
    Answer Applies to: Nevada
    Replied: 11/18/2011
    James Oberholtzer, Attorney at Law
    James Oberholtzer, Attorney at Law | James Oberholtzer
    The answer to your question depends on the all of the facts of your specific situation. No attorney can give you specific advice to your situation without knowing the entire situation. I can comment generally based on the information that you provided in your question. However, you should understand that the information contained in your question does not contain essential information needed to provide you with legal advice. This message is not intended to be legal advice for you and you should not consider that we have formed an attorney/client relationship. I am assuming that you are in Oregon and that Oregon law applies. You could add one or more children to the deed; however, a better solution would be to set up a trust and convey the real estate into the trust. The trust can provide for the sharing of the property among the children and put a person in charge after your father becomes disabled or dies. It also gives some durability to the plan; so, it does not get derailed in the future.
    Answer Applies to: Oregon
    Replied: 11/18/2011
    Bullivant Houser Bailey PC
    Bullivant Houser Bailey PC | Darin Christensen
    He should not. He will create more problems than he solves. The child will be an owner and entitled to part of the sale proceeds if the house is sold. If the child has or runs into creditor problems, the creditors could force the sale of the house. After your dad's death, the child may choose to claim that the child was on title because your dad wanted the child to end up as sole owner and the other kids will have a bit of a fight to overturn it. The transfer also can disqualify your dad from Medicare if he needs it in the next five years. A revocable (living) trust is a better way to avoid probate. A transfer on death is another alternative that has some problems but not as many as adding a child as a joint owner.
    Answer Applies to: Oregon
    Replied: 11/18/2011
    Martin Barnes - Attorney at Law
    Martin Barnes - Attorney at Law | Martin Barnes
    An Indiana attorney can help you prepare the deed. If real property is titled jointly with rights of survivorship, then the property passes to the other party named on the title, and the property would not be included in probate assets. Your dad should be certain that is how he wants the property to pass since any language in the will concerning that property would be superseded by the title. (i.e. if only one child is named as the joint tenant the other children would not receive any interest in the property.) Perhaps your father should have a will prepared and examine his estate assets from an overall perspective to ensure that his estate will pass to the heirs as he intends.
    Answer Applies to: Indiana
    Replied: 11/18/2011
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