Estate Planning

Should I Add My Child’s Name to the Home Deed?

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Many answers to questions from attorneys begin with, “It depends,” followed by a long list of rules, which themselves are followed by a longer list of exceptions. This is not one of those answers! Instead, the answer to whether you should add your child to the home deed is almost always, “Never.”

There are many reasons why. Here are some of the most important reasons why you should not add your child to the home deed.

1. Liability

Adding your child to the home deed means you are opening yourself up to their liability. Co-owning any property with other people means you are as strong as your weakest link. Let’s face it. Most children are our weakest links. They can drive and get into a car accident and get sued. Or your child can run up their credit card bills and declare bankruptcy. They can get married and then get a divorce. If they become doctor, they may be accused of malpractice. They can run a business and owe a debt. You get the point!

By adding your child to the home, your home can be taken away from you in the lawsuit faced by your child. It’s too high a risk to take a chance.

2. Incapacity

Let’s say your child gets incapacitated in a car accident. We’ve seen this happen before, unfortunately. Believe it or not, in that situation, the fact that even one of the co-owners of the property is incapacitated means that the property cannot get re-financed or sold.


Because while the child is a co-owner, each and every co-owner must sign loan documents or sale documents. If the child is incapacitated and cannot sign, it means you need to get a conservatorship — and that will cost money and take time to solve!

3. Simultaneous Death

One of the most common reasons for adding a child to a deed is to avoid a probate. People think like this, “By adding my child on the deed, when I die, then my child will get the property.” This is only partly true. If the child is added a joint tenant, it could be true. However, if the child is added as a tenant-in-common, this is not true; that is, once you die, your share will not pass to the child but rather will go according to your trust. If you don’t have a trust, there will be a probate.

However, even if there is a joint tenancy, what happens if you and your child pass away at the same time? What happens even if the child inherits the property without a probate? When the child passes, there will still be a probate. So, it’s better to deal with the situation rather than sticking your head in the sand.

4. Property Taxes on the Home

There used to be a time in California where you could add your child to the deed of the home and it would not affect your property taxes (Prop. 58). However, for any transfers after February 16, 2021, adding your child to the deed will cause a change in ownership and will trigger a reassessment. There are limited exceptions which, even if they did apply, may still risk a fight with the County Assessor.

5. Capital Gains Taxes on the Home

By adding your child to the deed, your child will inherit your carry-over basis. This means, that when you die, the child will not receive a step-up in basis for the amounts gifted to the child. Instead, when the child sells the home, they will end up paying more in capital gain taxes! Many times, these taxes can be a substantial amount (which can of course be avoided with a living trust)!

Read here for a more detailed explanation of the step-up in basis and how it works.

6. Gift Taxes on the Home

By gifting your home to your child, you will be making a taxable gift that eclipses the annual gift tax exemption (in 2021, that amount is $15,000 per year). This means you will need to not only add the child to the deed, but you will also have to file a Gift Tax return notifying the IRS of the gift you made. This also usually requires an appraisal of the home, both of which will cost you money.


Many people also contemplate using beneficiaries in order to do their planning. Beneficiary-designated accounts also pose risks. Read our article, “Do Beneficiary or Joint Accounts Avoid Probate?”

If you are contemplating a strategy to pass your real estate to your children, you should do so by way of a trust. Though it will cost to create a trust, the savings will pay for themselves, not to mention the avoidance of the problems listed above. Consider that the cost of a probate is usually $50,000 and up in California. Thus, spending a few thousand dollars on a trust and comprehensive estate plan is a good, sound investment.

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We want you to feel comfortable discussing your legal issue with us, so we offer a free consultation to learn about your problem. Contact us today to setup a time to come in and talk with our team.