THREE REASONS WHY YOU SHOULD NOT TITLE ASSETS IN YOUR CHILD’S NAME
There is a lot of layman’s advice about how to avoid probate court. One method to avoid probate is to title an asset (such as a 
home or a financial account) in a loved one’s name. This works well for spouses. For example, the designation for titling a home owned by a married couple is “joint tenants with rights of survivorship”. This designation permits a grieving spouse to remove a deceased husband or wife’s name from the title after he or she has died. All the spouse has to do is fill out an affidavit and deliver a death certificate to the county recorder’s office. This immediately transfers the title from both spouses names, to the surviving spouses name only. The “joint-tenant” designation was originally intended for spouses.
It is usually not a good idea to list your children on title for the purpose of probate avoidance. These are the reasons why:
1. You expose your home to your children’s debts. Once on the title, your child really does
own your home. That interest is an asset than can be pursued by creditors. Your child’s debts become your debts.
2. Your child may be able to encumber your home with a mortgage or loan. Older
couples should remember that they have spent a lifetime building equity in their
homes. It is not a good idea to simply give that equity to a child. When you place your son or daughter on title, they may be able to secure a loan on the property.
3. Selling your home is far more complicated with another person on title. Because
your child owns a portion of your home, he or she may be asked to sign closing
documents if you need to sell. If your child refuses… you are out of luck.
See an attorney about how to avoid probate without listing your children or grandchildren as the owners of you home, banking account, or vehicles. We have some excellent estate planning tools that we can use for your plan.
Contact Howard, Lewis and Petersen, PC. for all your probate and estate planning questions.
