Clients often contact me to prepare a deed which puts the title to their house or other property in joint ownership with the right of survivorship with their children. They want to do this as an easy, inexpensive way to transfer title of the property upon death. While such measures can sometimes work out fine, there are numerous potential complications which can occur.
The first rule to follow is never put a minor child’s name on the title to real estate. In order to sell or borrow against the property, a court-approved guardianship will have to be created to transfer the minor child’s interest, with an ongoing requirement for periodic accountings to the court.
Even with adult children, it is usually not a good idea to deed your real estate in joint ownership with them. Your property can become subject to any debts, liabilities or tax liens which your child might incur. There can also be gift tax implications. In addition, you will have to obtain the child’s signature on any future transactions regarding the property. We never like to believe it can happen, but I have had clients whose child refused to sign for a sale of their house until the parents agreed that the child would receive half of the money from the sale.
There are much better and safer ways to transfer property to your children upon your death without probate. Of course, a living trust is probably the best form of estate planning for most people. With a living trust, probate is avoided for all of your assets in a comprehensive approach. There are also other creative estate planning tools such as a deed which takes effect only upon death. See an experienced estate planning attorney for a consultation to determine the best way for you and your family.
Bruce L. Woodbury is an attorney with the law firm of Jolley Urga Wirth Woodbury & Standish. The firm has offices in Boulder City and Las Vegas. To contact Bruce, call him at 293-3674 or 699-7500, or visit his website at www.juwws.com.