Are you thinking of putting your child’s name on the deed to your primary residence? It may seem like a good idea so that they can avoid taxes that will be assessed as part of the estate or for ease of making decisions should you become incapacitated.

Truth is there are a few reasons that putting your child onto your primary residence could actually be a bad idea.

You May put Your Property at Risk

When you put your child onto your residence that means your property becomes subject to joint tenant laws. This means that any debts that might be on your child could become leans on your residence. It also means that any legal feels or lawsuits that your child becomes involved in could also end up counting your home as one of their assets. This means that your child’s share of your home could be used to settle these debts.

It is Considered a Gift

When you put your child onto your residence you are making a gift to your child. While this might not seem like a big deal on the surface, it can affect many things such as your ability to claim Medicaid benefits.

There can also be tax implications for making a large gift, depending on the value of your home. There are federal limits on the amount of tax free gifts you can give out during a year. If you exceed those amounts you may be at risk for a hefty tax penalty.

These gifts can also be part of your Medicaid look-back period. This is usually a five year period that can prevent you from getting Medicaid benefits.

If you need assistance with estate planning or other elder law issues, contact the experts at Stano Law group.