Pros and Cons of Adding Adult Children to the Title of my Home
Elder law attorneys get a lot of good questions from concerned people, but one of the most common questions involves adding a child to the title of the family home. There is a big difference between simply adding your child to the title or deed of your property and taking advantage of some of the legal vehicles that allow that transfer to take place automatically upon your death. There are pros and cons to adding your adult child to the title of your home, but you should not make this move until you have talked to an elder law lawyer.
Transfer of Property
By simply adding your adult child to your deed or home title, the transfer of ownership would happen automatically upon your death. In the state of Florida, this would bypass probate and allow your child to take ownership of the home uncontested. However, this exposes both you and your child to severe risks.
Taxes
If you add your child to your home’s title, you could be setting up your child for a large tax bill each year. If the house is paid for in full, then adding your child to the title makes your child half owner of the property. In some areas, this means that your child would be responsible for half of the property taxes every year.
Exposure
When you put your child on your home’s title or deed, your child automatically becomes a part owner of that property. That means that your home would become exposed to any legal or financial dealings your child may have. For example, if your child gets divorced then your home could become part of the divorce settlement. If your child gets sued for negligence in a personal injury accident, then your home could become liquidated to satisfy that debt.
Medicaid Estate Recovery
When you apply for Medicaid to help pay for an assisted living situation, all of your assets are considered available to a process called estate recovery. After you pass away, Medicaid will start liquidating your estate to pay for the costs you incurred while in assisted living. Unfortunately, having your child on the title to your home only complicates the matter and does not guarantee a smooth transfer of ownership.
A Life Estate is the way to make sure that your child can take possession of your home after you pass away and keep your home from being part of Medicaid estate recovery. An elder law attorney can help you and your child to set up a plan that will seamlessly pass ownership of your home to your child after you pass away.
The Mattar Firm is experienced in elder law and we are ready to answer your questions about transferring your home to your child and any other concerns you may have about your assets.