 | John Gerdes
is an attorney with Fleeson, Gooing, Coulson & Kitch, L.L.C. John received his bachelor of arts degree from Benedictine College in 1982; his juris doctor from Washburn University, graduating cum laude, in 1989; and his LL.M. in Taxation from the University of Florida in 1991. John joined Fleeson, Gooing, Coulson & Kitch, L.L.C., in 1991 and practices primarily in the areas of taxation and business. He has made numerous presentations before civic and professional groups regarding taxation and business matters. You may contact John by phone at (316) 267-7361, or visit the web at www.fleeson.com |
Legal
2004-04-01 14:42:00
Adding a child's name to title
ANSWER: I assume you and your husband do not intend to give your child any ownership interest in your house at this time but rather want him or her to inherit the property after you both die. I also assume that you were thinking about adding your child to the title on your house as a joint tenant with rights of survivorship.Adding your child as a joint tenant with rights of survivorship will avoid probate by automatically transferring legal title to your house to him or her upon your and your husband's death. However, as discussed below, this creates potential problems for you and your husband during your lifetimes.Adding your child's name to the title on your house as a joint tenant suggests to the world that he or she currently owns an interest in the house. That could create a number of potential problems for you and your husband. A creditor of your child could file a lien (tax or judgment lien) on your house in an attempt to collect your child's debt. Any such lien would interfere with your ability to sell or borrow against the property. More importantly, certain creditors could force a sale of your house to collect on your child's debt.In addition to making your house available to your child's creditors, your child could hinder your rights to the property. For example, he or she may refuse to execute a deed or otherwise cooperate with you in the event you later decide to sell the property or give it to someone else at death.You and your husband might be able to avoid these potential problems by proving that you did not intend to give your child any current ownership interest in the house and that you only added him or her on the title for convenience sake to avoid probate at your deaths. However, doing this could be time consuming, costly and require litigation. In addition, after the death of you or your husband, the survivor may not be able to correct these potential problems. In lieu of adding your child to the title, there are two other means of transferring ownership of your house to your child after death without need for probate. Both of these methods also avoid the potential problems discussed above.First, Kansas law permits you and your husband to file with the Register of Deeds office a "transfer on death" deed that would transfer ownership of your house to your child after your deaths but would not give him or her any current ownership interest during your lifetimes. During your lifetimes, you can revoke or replace that deed without your child's cooperation or permission. This arrangement is similar to a "pay on death" account that you may maintain with your bank, savings and loan or credit union.The other method of avoiding probate would be the creation of a revocable trust (also referred to as a living trust). You and your husband could then transfer legal title to your house to that trust. The trust document itself would spell out when your child is to receive your house. During your lifetimes, you and your husband would retain the right to revoke and amend the trust and you would normally also act as the trustees of the trust. Since the trust owns the house, there is no need for a probate proceeding to determine ownership of the house after the death of you and your husband. If it is your desire, the trustee or successor trustee would simply transfer legal title to your house from the trust to your child after your death. On the downside, preparation of the trust document can be expensive and time would need to be devoted to administering the revocable trust after your deaths.Since your house is your major asset, you may want to use the "transfer on death" deed which is considerably less expensive and time consuming than a revocable trust. If you had other significant assets that could not be transferred through a "transfer on death" deed or other means to avoid probate, then creation of a revocable trust might be the more desirable option. Whether you choose to create a revocable trust or utilize a "transfer on death" deed to transfer ownership of your house to your child, I recommend that you consult an attorney to assist you.
