Deeding a Home to Your Kids

Usually it is a bad idea. Putting a child’s name on the deed in any manner by transferring the home to the child outright or making the child a co-owner (whether as a tenant-in-common or a joint tenant with right of survivorship) gives the child a permanent ownership interest in your home. Such gifts often can create unintended long-term consequences, and may wind up endangering your financial security and damaging your relationship with your children. (See our article on Leaving Gifts to Minors in Your Will.)

For example, you’d need the permission and notarized signature of each child whose name is on the deed to sell or refinance the property. It may also impact your real estate and income taxes, and jeopardize any homestead exemption.

With a child’s name on the deed, your house becomes vulnerable to claims of that child’s current and future creditors. Your other kids may resent the child who is named.

A better approach would be to make sure that your Will is up-to-date so that in the event of your death the value of the house could be equally shared by your children. Better still would be to hold the home in a Living Trust. (Read our article on Options for Distribution of Assets in Your Estate.) In any event, get the advice of a qualified estate planning attorney; your home is far too valuable to risk with a do-it-yourself approach.