A lot of estate planning is for the purpose of avoiding probate or minimizing the amount of time that assets spend there. This makes sense: after all, if the assets are in probate they cannot benefit your beneficiaries.
However, some gambits for avoiding probate are smarter than others. Some Americans wonder if putting an adult child or other responsible individual on the deed to their home is a good idea since it does involve skipping probate. However, according to InCharge, this is almost never a good idea.
How does this help skip probate?
Putting another adult on the deed to your home relies on “joint tenancy.” Essentially, if two adults hold a home in joint tenancy and one of them dies, the other gets the house automatically. The property does not go through probate.
What are the pitfalls?
Just because you put a loved one on the deed to your home does not necessarily mean that they will enact your wishes after you die. For instance, if you decide to put your responsible oldest child on the deed to your home with the stipulation that once you are dead they will sell the property and split it, this does not mean it will come to fruition. The child may choose to keep all of the money for themselves.
Additionally, any property you hold jointly with somebody may be at risk if one of the owners is in trouble with the IRS. The IRS may choose to come after the house for unpaid taxes. For instance, if the IRS forces the sale of the property, both parties will get a part of the sale, but you will lose the home.