Should I Make My Child a Co-Owner of My Home in Order to Avoid Probate in Plantation?

A common priority for various families is to avoid probate in Plantation. An obvious strategy to accomplish this goal involves the “right of survivorship.” If you pass away and your children are joint owners of your family home, they’ll inherit the property without going through probate. But is this really the right option for your family? What are the pros and cons of this approach? Consider asking these questions during a consultation with a Plantation estate planning lawyer.

Adding Your Adult Child to the Deed Presents New Risks 

When you add your children to the deed, you don’t simply make them co-owners. You also lose some of the legal control over your own home. This means that you cannot sell your home without getting permission from your adult children first. You also can’t make many other major decisions involving your home without their consent.

Another risk is divorce. If your child gets divorced and your family home is one of their assets, your property could get tied up in the property division process. In a worst-case scenario, the divorce could force you to sell your home.

Finally, your child could get themselves into significant debt. Once this happens, their creditors could theoretically come after your home for the money. Note that because the home is not their primary residence, the homestead exemption does not provide much creditor protection in this scenario.

Adding Your Child Could Make Medicaid Planning Difficult

Another potential issue involves Medicaid. The most important thing to realize about this strategy is that when you add your child to the deed, the Internal Revenue Service treats it like a gift. This also means that Medicaid will see this gift as a non-exempt transfer. Once you make this transfer, you may have to wait five years before applying to Medicaid. Apply sooner, and Medicaid could reject you.

What Should I Do Instead?

All of this does not necessarily mean that adding your child to the deed is a terrible idea. It will help your child avoid probate, and this can be extremely beneficial in many situations. However, you might want to consider alternatives before you make any major decisions. One option is a revocable living trust, which allows you to transfer the home into your trust and exert more control over the situation while still avoiding probate.

Another more flexible option is a Lady Bird deed, which allows you to pass the home to your adult children when you pass away without adding them to the deed today. This option also avoids probate.

Can an Estate Planning Lawyer in Aventura Help Me?

An estate planning lawyer in Aventura may be able to help if you’re searching for ways to pass wealth to your children while avoiding probate. Although joint tenancy and the right of survivorship represent a legitimate strategy in many cases, it might not be the best choice for all families. Discuss your specific situation in more detail during a consultation with 411 Probate.

Source: 

medicaidplanningassistance.org/lady-bird-deeds/