If one's biggest asset is a home and there are no debts or tax concerns that need to be settled in court, it may be possible to take certain measures during the estate planning process that can help surviving family members avoid litigation following one's death. Avoiding probate is a goal for many California residents. No one wants to put their loved ones through it if it is not necessary. In some cases, a simple change while one is alive is all that is needed to have his or her estate avoid probate.
By adding a child or other loved one's name to a house deed, the property becomes jointly owned and, therefore, is not subject to distribution to other beneficiaries or the probate process. The property will simply belong to the surviving owner. Sounds good, right?
While adding someone to the property deed may make passing it along in the event of one's death a little easier to handle, it is not without its negative points. The new joint owner may be left to deal with tax issues, particularly capital gains taxes if he or she eventually sells the property. Depending on what a house sells for, that can be a significant sum.
This is just one of the many possible issues that come with adding someone to the deed of one's home. An experienced estate planning attorney can assist California residents who are considering this option as a way to avoid probate. In some cases, it can work beautifully; in others, it may not be the wisest choice. By seeking legal guidance, one will be able to make the best decision for his or her circumstances and estate planning goals.
Source: thebalance.com, "Avoiding Probate by Adding Your Child's Name on the Deed of the House", Julie Garber, April 5, 2017