It may seem like the simplest way to pass your property to your children at your death, but changing the title to your home usually is not the best option. An attorney in Utah can tell you what would be best for your situation.
There are several different concerns if you change the title of your home into a child’s name. More often than not, re-titling the home can create more problems than it solves. Lawyers at a Utah law firm think transferring title to the home is not a good idea in most cases and that there are better ways to accomplish your goals.
Adding a child to the title or changing it to his/her name, legally gives him/her part or full ownership of the house. This means your child can sell it, mortgage it, do whatever he/she wants with it, or even start charging you rent.
Even if you think your child would never do any of those things, don’t forget about his/her creditors. For example, this means that if your child has creditors trying to collect from him/her, the creditors will see your child listed on the title and they may be able to collect on the child’s portion of the house. If you had taken your name off the title and only listed your child’s, this means the creditor could take possession of the home and kick you out.
Additionally, changing the way the home is titled can have tax consequences. For example, your child may lose the step up in basis at your death, that they would have received if you had left the home through a will or trust. This means there could be capital gains when your child sells the house and a tax due.
There are also gift tax issues with gifting more than $13,000 to an individual in a year. You should always discuss any tax issues with your accountant and estate planning advisor at a Utah law firm.
If you need help leaving your assets to your children, an attorney at a Utah law firm can help you plan a simple or complex estate to meet your needs.