Many people specifically set up their estate plan to avoid probate. There are many reasons to avoid probate, including the fact that it can be time-consuming, expensive and the public nature of probate is off-putting to some.
However, just because a particular strategy helps you avoid probate does not mean that it is a good strategy to pursue. Many older Americans are thinking about adding their adult child onto their deed as a way to avoid probate. However, this is almost never a good idea. According to InCharge Debt Solutions, adding an adult child to your deed as a way to avoid probate almost always causes more problems than it solves.
How does this help avoid probate?
Putting your adult child on your deed means that both you and your child will own the property under joint tenancy. One of the pillars of joint tenancy is the right of survivorship. This means that if one party dies, the other party automatically inherits property without the property going through probate.
Why is this a bad idea?
Putting your adult child name on your deed means that he or she is an immediate owner of your property. This means that, for example, if the IRS comes after your adult child for unpaid taxes, they may put a lien on your house as it is technically your child’s property. If your child gets married and then divorces, the divorce court will hold your property as your child marital property. This means that your child ex-spouse may end up as an owner of your home.
A better way to help your child avoid probate is to put your home in a revocable trust.