Is Putting My Kids On The Deed To My House A Good Idea For Estate Planning in Oklahoma

Whether or not you should put your kids on the deed to your house is a tricky option. The primary parents consider doing this is to avoid creditors or for estate planning. It is trues that Estate planning is a crucial aspect of managing your assets after your pass. After all, most people want to help their kids after they are gone and the house is going to them anyway. For many homeowners, putting their Kids on The deed to their house seems a simple yes or no question. While it seems like a straightforward solution to facilitate the transfer of property to loved ones, there are important factors to consider before making this decision.

Understanding Joint Ownership

Putting your kids on the deed of your house typically involves transferring partial ownership of the property to them. This can be done through various means, such as joint tenancy or tenancy in common. In joint tenancy, each owner has an equal share of the property and rights of survivorship, meaning that if one owner passes away, their share automatically transfers to the surviving owner(s). Tenancy in common, on the other hand, allows each owner to hold a distinct share of the property, which can be unequal, and does not include rights of survivorship.

Pros of Adding Children to the Deed

1. Probate Avoidance: One of the primary reasons individuals consider adding their children to the deed is to avoid probate. By transferring ownership during your lifetime, the property can pass directly to your children outside of the probate process, potentially saving time and money.
2. Ease of Transfer: Putting your children on the deed is easy. Adding children to the deed can streamline the transfer of ownership after your passing. It can be as easy as drafting and filing a quitclaim deed. This may seem simpler than options to transfer the property by will or trust.
3. Asset Protection: In some cases, transferring ownership of the home to your children may offer certain asset protection benefits, particularly if they are facing financial challenges or creditor claims. In some cases this might be simpler than creating an asset protection trust.

Cons of Adding Children to the Deed

1. Loss of Control: Once you add your children to the deed, you relinquish sole control over the property. This means that decisions regarding the property, such as selling or refinancing, will require the agreement of all owners.
2. Tax Implications: There may be tax implications associated with transferring ownership, including potential gift tax implications for the transferor and capital gains tax implications for the transferees upon the sale of the property.
3. Liability Risks: This can be a huge drawback to adding your kids to your deed. Adding children to the deed exposes the property to their creditors and legal liabilities. If a co-owner faces financial difficulties or legal claims, the property could be at risk. Simple things like your child being ion a car accident or having judgement liens against them can put your property at risk. Lets say they owe money and the creditor gets a judgement this can be a real issue. Once the creditor gets the judgement that creditor can easily place a lien on the property.

Alternatives to Adding Children to the Deed

1. Trusts: Establishing a revokable trust allows you to retain control over the property while designating beneficiaries who will inherit it upon your passing. Trusts offer flexibility and can provide asset protection benefits. Depending on the Trust tool you use the trust can be changed at anytime you want. The trust can also set up other conditions to the transfer or can add multiple people to the gift.
2. Transfer-on-Death Deed: This method of transfer is simple. In Oklahoma, you can use a Transfer-on-Death Deed to designate beneficiaries who will inherit the property upon your passing without the need for probate. There are a few requirements that must be met upon your death but if done correctly the process is smooth.
3. Life Estate: With a life estate, you retain the right to occupy and use the property during your lifetime, with ownership passing to your children upon your death. Once again though you are giving up total control of the property. You are also subjecting yourself to the same liability risks as set out above.

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Estate Planning In Tulsa You Can Count On

While putting your kids on the deed to your house may seem like a simple solution for estate planning, its probably an idea that can be done in a smarter way. When ever you give up control of your home it’s essential to carefully weigh the pros and cons before making a decision. Our estate planning attorney can help you achieve your goals without all the risk. Whether through trusts, transfer-on-death deeds, or other estate planning tools, there are alternatives available to you that are probably better. For a free consultation with a estate planning attorney in Tulsa call Kania Law Office at 918.743.2233. Or if you like click this link to ask a legal question online.