Deeding a Home to Your Kids

UPDATED: Jul 12, 2023Fact Checked

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Jeffrey Johnson

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 12, 2023

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UPDATED: Jul 12, 2023Fact Checked

Usually it is a bad idea. Putting a child’s name on the deed in any manner by transferring the home to the child outright or making the child a co-owner (whether as a tenant-in-common or a joint tenant with right of survivorship) gives the child a permanent ownership interest in your home. Such gifts often can create unintended long-term consequences, and may wind up endangering your financial security and damaging your relationship with your children. (See our article on Leaving Gifts to Minors in Your Will.)

For example, you’d need the permission and notarized signature of each child whose name is on the deed to sell or refinance the property. It may also impact your real estate and income taxes, and jeopardize any homestead exemption.

With a child’s name on the deed, your house becomes vulnerable to claims of that child’s current and future creditors. Your other kids may resent the child who is named.

A better approach would be to make sure that your Will is up-to-date so that in the event of your death the value of the house could be equally shared by your children. Better still would be to hold the home in a Living Trust. (Read our article on Options for Distribution of Assets in Your Estate.) In any event, get the advice of a qualified estate planning attorney; your home is far too valuable to risk with a do-it-yourself approach.

Case Studies: Deeding a Home to Your Kids

Case Study 1: The Outright Transfer

John decides to transfer the ownership of his home to his daughter, Emily, outright. However, this decision leads to unintended long-term consequences.

Emily becomes a permanent owner of the house, requiring her permission and notarized signature for any future sale or refinancing. Furthermore, John’s other children may develop resentment towards Emily, and the home becomes vulnerable to claims from Emily’s creditors.

This highlights the importance of considering the long-term implications and seeking professional advice before deeding a home to a child.

Case Study 2: Co-Ownership

Sarah and David, a married couple, decide to make their son, Michael, a co-owner of their home as a joint tenant with the right of survivorship. While this arrangement may seem beneficial for estate planning purposes, it poses potential risks.

If Michael encounters financial troubles or legal liabilities in the future, their home could be subject to claims from his creditors. Additionally, the co-ownership arrangement requires the consent of all parties involved for any property-related decisions.

Sarah and David discover that their decision to include Michael as a co-owner has unintended consequences that affect their financial security and relationship with their child.

Case Study 3: Alternative Approach

Laura and Mark take a different approach to ensure the fair distribution of their home to their children. They consult with a qualified estate planning attorney who advises them to update their will and consider placing the home in a living trust.

By doing so, Laura and Mark can ensure that the value of the house is equally shared among their children in the event of their passing.

This alternative approach minimizes the risks associated with deeding the home directly to their children, providing a more secure and equitable solution.

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Jeffrey Johnson

Insurance Lawyer

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Insurance Lawyer

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

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