Leaving Your Home to a Loved One: Should I Add Them to the Title?
For many Gwinnett County residents, their home is their greatest asset. Accordingly, when it is time to start thinking about estate planning and particularly the components of an estate plan that involve leaving assets to beneficiaries, most people want to be clear about who will inherit their home. For the sake of beneficiaries, many homeowners want to be able to leave their house to an adult child or another relative in a manner that avoids probate, which can be a lengthy and complex process. If you are in this situation now, you may be wondering about options available to you other than leaving your home to a loved one in your will. You might be wondering if it makes the most sense to simply add your loved one to the title of your home so that they become the owner when you pass away.
To be clear, adding an adult child or another loved one to the title of your home is not the best way to transfer a major piece of real property, especially your home. Our Norcross estate planning lawyers can explain why, and we can tell you about other options for ensuring that your loved ones seamlessly inherit your home and any other real property.
Reasons to Avoid Adding a Beneficiary to the Title of Your Home
Adding an adult child or another loved one to the title of your home may create problems that you were not anticipating.
For example, your child or other loved one could end up owing substantial capital gains tax if they ultimately sell the property after your death. Or, during your lifetime, having another title owner on the house could complicate your eligibility for Medicaid coverage for long-term care and options for “spending down.”
Ways to Leave Your Real Property While Avoiding Probate
Whether you own a single piece of real property that is currently your primary residence, or you own a primary residence as well as one or more vacation or rental properties, you have options for leaving these assets to your loved ones without risking the issues discussed above and while still avoiding probate. The two major options are:
- Create a revocable living trust and place your home or other real property into the trust (allowing you full control of the real property during your lifetime, including the ability to amend the terms of the trust or to cancel it if circumstances change); or
- Create a transfer-on-death deed for your real property, a relatively new option in Georgia for transferring real property to beneficiaries upon death (similar to a payable-on-death beneficiary designation on a bank account).
Contact a Gwinnett County Estate Planning Lawyer for Assistance
While identifying assets and beneficiaries to whom they should be distributed is only one component of estate planning, for most people, it is a very important component. When your home is your primary asset, we know how important it is to ensure that someone you love and trust inherits the property. Although it might at first seem logical to simply put a loved one on the title to your home rather than making a will or placing your home in a trust, there are many reasons that this is not the best solution — for the reasons we discussed above. Instead, as we noted above, there are other ways to leave your home in Georgia that can also allow your loved one to avoid probate without putting your property at risk. Contact an experienced Gwinnett County estate planning attorney at Bowman Law Firm today for assistance creating a payable-on-death deed, a trust, or will.
Sources:
https://law.justia.com/codes/georgia/title-53/
