{"id":6822,"date":"2025-09-12T07:05:55","date_gmt":"2025-09-12T11:05:55","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=6822"},"modified":"2025-09-12T07:05:58","modified_gmt":"2025-09-12T11:05:58","slug":"should-we-name-our-adult-child-on-the-deed-so-probate-and-title-transfer-arent-needed-later","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/should-we-name-our-adult-child-on-the-deed-so-probate-and-title-transfer-arent-needed-later\/","title":{"rendered":"Should We Name Our Adult Child on the Deed, So Probate and Title Transfer Aren\u2019t Needed Later?"},"content":{"rendered":"\n
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Would it make it easy on you and your adult child to put the child\u2019s name on the deed to the home you\u2019re buying? Especially if you\u2019re an older adult, it might seem to make perfect sense.<\/p>\n\n\n\n

But the answer isn\u2019t as easy as it might seem at first glance. So, read on. You might just decide that everyone\u2019s interests could be better served if you simply put your own names on the deed.<\/p>\n\n\n\n\n\n\n\n

Control Over Your Asset Matters<\/h2>\n\n\n\n

First, a threshold question. Do you plan to buy using financing? If so, then everyone named on the deed will own a real estate asset \u2014 which is also the lender\u2019s collateral. Ask your mortgage consultant if all title holders are expected to take responsibility for the property\u2019s debt.<\/p>\n\n\n\n

Lenders generally don\u2019t like to allow for extra complications in case of default. Your child may need to be vetted as a mortgage holder along with you.<\/p>\n\n\n\n

And that brings us to the topic of credit profiles. If you name your adult child on your new deed, then your child\u2019s whole credit picture becomes linked to your home property.<\/p>\n\n\n\n

Your adult child could face relationship changes, financial challenges, even court actions that could position third parties to acquire a claim on your property. In a worst-case scenario, you could wind up arguing in court that your home should be separate from your child\u2019s activities. If the court disagrees, you could lose your property.<\/p>\n\n\n\n

Even in the best of scenarios, you\u2019ll need your child to sign off if you ever want to use your home for income or borrow against your home equity. And when determining your creditworthiness for a home equity loan, the mortgage lender will be examining your child\u2019s credit profile as well as yours.<\/p>\n\n\n\n

In short, you aren\u2019t just planning to avoid probate later by putting your child\u2019s name on the deed. You\u2019re mixing your financial affairs with those of your child. That might go well. Or it might backfire spectacularly. Because life is full of surprises.<\/p>\n\n\n\n

Indeed, unforeseen occurrences can upset a loving parent\u2019s best-laid plans. Who among us knows that we\u2019ll even outlive our grown children? If your adult child were to pass away before you do, your child\u2019s heirs could become owners of the property, depending on how the deed is vested.<\/p>\n\n\n\n

Time to transfer a deed? We keep our\u00a0<\/strong><\/em>deed forms<\/em><\/strong><\/a>\u00a0continually updated, in full compliance with state and county standards.<\/strong><\/em><\/p>\n\n\n\n

Potential Tax and Benefits Impacts<\/h2>\n\n\n\n

If your adult child becomes a co-owner, then your child is, for tax purposes, acquiring (through a joint vesting<\/a> of the deed) a share of the property at the price you\u2019re paying for it. After parents pass away, what if the child who\u2019s on the deed wants to sell? They will be responsible for capital gains. Capital gains taxes are added up based on the rise in property value from the time they vested.<\/p>\n\n\n\n

Gains on inherited property, in contrast, are only taxed from the date of the inheritance, not all the way back to when the home was acquired.<\/p>\n\n\n\n

Also speaking of taxes, adding your child\u2019s name to a deed for free is a taxable gift, and must be reported as such when you file your returns for the year. This may or may not matter to you, but it will impact your lifetime tax exclusion allowance for gifts. (More on gift taxes and exclusions<\/a> appears on the IRS website.) And the gift will also come to the attention of Medicaid if you need to qualify for assistance within the next five years.<\/p>\n\n\n\n

Given that timing and your personal finances come into the above calculations, this is a complex and case-specific decision to make. An estate planning expert can guide you in putting together your optimal estate plan.  <\/p>\n\n\n\n

You don\u2019t <\/strong><\/em>need a lawyer to create a deed<\/em><\/strong><\/a>. Yet a lawyer in the state where the property is located can check your documents to be sure you\u2019re not missing anything you need to know, given your personal situation.<\/strong><\/em><\/p>\n\n\n\n

What Are Your Alternatives?<\/h2>\n\n\n\n

You\u2019ve got choices. There are a number of ways to enable your adult child to receive your property in the future. You might consider: <\/p>\n\n\n\n