Eight Reasons Not to Add Your Child to the Deed of Your Home
Adult children sometimes put pressure on their parents to add their names to the deed of the home owned by their parents. Regardless of the arguments made, it is always dangerous for the parent or parents to do so. Before you make such a transfer, discuss the matter with a real estate attorney because these are some of the possible risks of doing so:
- You will not be able to sell or refinance your home, including obtaining a reverse mortgage, without the written approval of your child.
- Upon your death, children may be put into a position of having to pay a substantial tax that could otherwise be avoided.
- If your child gets divorced, the home is likely to be considered a marital asset subject to sale.
- Any transfer made to a child becomes subject to collection by that child's creditors.
- Should your child ever file for bankruptcy, the house will fall under the jurisdiction and control the bankruptcy court.
- Personal injury claims against your child, not covered by insurance, could put the home at risk.
- Should your child predecease you, his or her share of the home will pass to his heirs.
- Your child will obtain the right to rent out one or more rooms in the house to third parties.