This is part two of our article, 5 Reasons NOT to transfer Your House to Your Child. We frequently, very frequently, receive a request to help a client transfer her house to a child. Often when a client is widowed and/or become elderly, she often wants to make things easier when she passes and looks to avoid inheritance taxes.
IF THIS SOUNDS FAMILIAR TO YOU, STOP! THERE ARE 5 REASONS NOT TO TRANSFER YOUR HOUSE TO YOUR CHILD.
- Loss of Control
If you transfer your house to your child, it means that you no longer own your own home. This is a total loss of control.
This means your child can sell the property without your permission or move into the home (with his 3 sullen, yet extremely loud, teenagers.)
If your child has or develops a drug, alcohol, or gambling problem or becomes otherwise estranged, he can take your house.
- Subject to Your Child’s Creditors
If your child owns your house, it can be seized by his creditors. For example, your house could be taken by your child’s divorcing spouse, bankruptcy, business failure, medical crisis, malpractice lawsuit, and car accident lawsuit.
- Unintentional Disinheritance
If you put one child’s name on the deed of your house, that is a gift to that child. Your other children are not entitled to any portion of that house. So, you are disinheriting them as to the house, no matter what your will provides.
Please be sure to check out part 1 of this 2 part article. And, if you have any questions or concerns about the transfer of your home to your child, call our office for a free, no obligation consultation. (619-696-0778)
Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.