Can I Give My House to a Friend?

For various reasons, some homeowners wish to leave their home or condo to a friend. Whether you want your friend to have the title during your life, or after you’re gone, here’s how it’s done.

Writing a Will: Can I Leave My House to a Friend?

You can leave your house, townhome, or condo to a friend in a properly written, signed, and notarized will. Your will can offer instructions on paying off the mortgage from the home equity, as guidance for your friend to obtain the value from your home.

Dealing With Debts

Assets such as funds or a home can be liquidated in the probate process to address debt. The remaining value may then be distributed to your named beneficiary or beneficiaries.

To be sure your plan is workable, ask yourself:

  • Will your friend be eligible to refinance and shoulder any remaining mortgage debt?
  • Could you accrue medical bills and benefits which could attach themselves to the home?

A wills and estates lawyer in your area can advise you on whether and how to reach your goals.

Questions From Relatives

Do you have family members who might second-guess your decision? Explain and get them on board now. Leaving them with a surprise can create tension for your friend as well as surviving relatives after you’re gone. Here again, a family law expert or estate planning lawyer can advise you on the best way to draft your will so your wishes are respected.

As a legal matter, most states let you pass over your relatives in your will, except for your spouse or domestic partner (if you have one and you’re not separated). Consider New Jersey, for example. There, a surviving spouse or domestic partner has a right of election to have a one-third share of your assets.

So, a probate court might allow the spouse to receive a certain portion of your estate. Search for right of election against will and your state to learn what the law of your home state says.

Will Anyone Challenge My Decision to Leave My House to a Friend?

Close relatives and people removed from a previous version of the will (in other words, people who actually may lose out if they don’t speak up) may contest the will in probate court, if they act in a timely manner. Each state has a specific statute of limitations.

In some states, absent proof of fraud or forgery, a will is binding, as long as it’s completed in compliance with state law. Where will contests are permitted, they usually claim that the will:

  • Doesn’t comply with state law. If you go to the trouble of writing a will (and you should definitely write a will!), be sure it’s valid. Write it, sign it, have a meeting with a notary, and have it notarized with witnesses. Check the laws of your state to be sure it complies, or hire a wills and estates lawyer to make sure.
  • Is not a true last will. Keep your current will in a prominent spot. Tell people where it is. Give copies to beneficiaries if you wish but tell people where you keep the original document. A mere copy could simply be disregarded in court. At best, your beneficiaries will have to go through extra work to demonstrate their status, and your intent.  
  • Was made without the necessary mental capacity. As long as you know what you have and who you are naming as its beneficiaries, you have the capacity to write a will. If you think this might be an issue, getting a medical professional to vouch for your capacity could be important. Speak with a lawyer if you’re not sure.
  • Was made under the undue influence of a beneficiary. Is it likely that someone in the position to challenge your will could call out your friend’s influence as inappropriate? Then get a lawyer’s opinion on how to solidify your intent.

To avoid probate entirely, you might decide to choose another vehicle to transfer the title to your home.

Alternative 1: Create a Revocable Trust, With Your Friend as Beneficiary.  

Another way to hold onto your home during your lifetime, and pass it to a friend upon death, is the living (revocable) trust. Unlike a will, a trust stays out of the public (and costly) process of the probate court.

The home can be quitclaimed into a revocable trust, with your friend named as the beneficiary. If you go this route, alert your mortgage company to your plans, and tell the title insurer and the homeowner’s (or condo owner’s) insurance company. You’ll need a policy in the name of your trust.

Is it costly to establish a living trust? A living trust may cost several thousand dollars to set up. Probate cases can run into the tens of thousands, depending on the value of the estate.

You can change your trust once it’s made. You can also have a mortgage on a trust property, as long as you have that authority as the trustee. After your lifetime, your friend can record the property in their name.

Important note: A living trust can make it harder to sell, refinance, or borrow against your home. Homeowners hire local estate planning lawyers to help them align the language of their trust documents with their goals.

Alternative 2: Where Allowed, Use a Transfer on Death Deed.

The transfer on death deed is a rising estate-planning workaround. It’s cheaper than forming a trust. It’s faster and simpler, too. Using a transfer on death deed is like passing a financial account to someone else by naming that person on a beneficiary form.

 If you are in a state that allows TOD deeds, you may create your deed when you’re ready. Here are up-to-date transfer on death deed forms.

A TOD deed must be recorded according to your county’s procedures. There’s a recording fee, but there’s no actual transfer, and no taxable event at the time of recording. Once the deed is recorded, the public is deemed to be on notice that your friend will take title when you die.  

The TOD deed transfers nothing while you are living. The TOD deed allows you to keep full control over your home. You may revoke the TOD whenever you want, the same way you created it: by properly drafting, signing, notarizing, and recording the revocation, or a new TOD that revokes a previously recorded TOD deed.

Selling the home is another way to revoke the TOD deed.  

 Find more context, and the steps to creating a TOD deed, here.

The TOD deed bypasses probate. Your friend will hold the title automatically when you pass away. Note that your friend will get not just the title once you are gone, but also your home loan(s). If your estate is heavily in debt, the probate court may be able to void the TOD deed and liquidate the value of your home to pay off your creditors.

A note on TOD deeds versus wills: A TOD deed is not a will. The TOD takes precedence over your will, so contrary language in a new will can’t revoke it.

Alternative 3: Give Your Friend the Home With a Gift Deed.

A gift deed is an immediate conveyance of property for no consideration. “No consideration” means money is not changing hands, and there are no strings attached. The transfer is purely a gift.

A valid gift, once accepted, can’t be contested or taken back. (That said, your friend is allowed to refuse to accept a house deed.)

 Follow the statutory requirements where your home is located. View gift deed forms on

Check for any applicable gift tax, federal or state. Under IRS rules, your friend gets your own cost basis and may owe capital gains if selling. In contrast, leaving a home to someone through a will or trust means the recipient can take advantage of a stepped-up (current fair market value) cost basis to offset capital gains.

Any current co-owner must sign the gift deed. If you are married, have your spouse release marital rights in writing. Record your gift deed in your county when you’re ready to transfer your title. In some states (like North Carolina) a gift deed is not valid unless recorded within two years.

Alternative 4: Add Your Friend to Your House Deed.

This is like the gift deed, but here, you deed your home to both of you, and become co-owners. If you want your friend to get 100% ownership once you die, the friend can be added as a joint tenant with rights of survivorship.

 Learn more about various ways of vesting a deed, including as joint tenants with right of survivorship.

Many home owners work with real estate lawyers to have their titles changed. As they’re conveying home equity, they should also go over the gift tax implications with their accountants.  

And before adding a new co-owner onto your title, think carefully. Is your mortgage company on board? How would you feel if your new co-owner’s creditors placed a lien on your home? Even if all goes well, you’ll need your co-owner’s agreement before you do anything with the home (such as borrow against it).

No Matter How You Plan to Give Your Home Away…

A will is always important. A will shows the late homeowner’s wishes regarding a number of questions, including who should receive personal belongings.

Wills, estates, trusts, and gifts can have unintended consequences that hinge on your special facts and plans. This article provides general information only — not legal or professional advice. Before making a move, consult your mortgage company, your title insurer, your homeowner’s insurance company, and your tax specialist. For legal questions about your individual situation, consult a reputable estate planning attorney near you.

Supporting References

IRS Frequently Asked Questions: Gifts & Inheritances.

New Jersey Rev. Stat. § 3B:8-1: Elective Share of Surviving Spouse or Domestic Partner of Person Dying Domiciled in This State; Conditions. As Boomers Retire, the Transfer on Death Deed Comes of Age (Mar. 18, 2022). The Gift of Real Estate: What You Need to Know (Jul. 11, 2019).

And as linked.

Photo credits: Andrea Piacquadio and Brett Sayles, via Pexels.