Have you considered adding a child on title to your home?
Aging home owners often add a child jointly on title to their principal residence to avoid probate fees upon death (approx. 1.4% of the property’s value). The transfer is also exempt from property transfer tax.
Although avoiding the aforementioned costs is a benefit, there are potential pitfalls to consider before adding someone on title, including: (1) You must obtain consent of the joint owner before selling or refinancing your home; (2) Creditors may register judgments against the interest of the joint owner; (3) If the joint owner separates from a spouse, your home may be tied up in family law proceedings; (4) A portion of your capital gain exemption may be lost if the transaction is not structured properly; and (5) Claims may arise against your home if your child becomes bankrupt.
Contact our office to determine if adding your child on title is the right estate planning tool to achieve your goals.
For more information, contact Cory Goodrich at Pearce Schneiderat 250-492-0907