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Should You Add Your Kids to Your Deed?

by | Jan 22, 2025 | Arizona Estate Planning

Adding your child to the deed of your home might seem like a simple way to avoid probate and streamline inheritance. However, this decision comes with significant legal and financial implications under Arizona law. Before proceeding, it’s crucial to weigh the pros and cons to determine if it’s the right choice for your situation.

The Pros of Adding Your Kids to the Deed

  1. Avoiding Probate: When your child is listed as a joint owner with rights of survivorship, the property bypasses probate upon your passing, transferring directly to them.
  2. Simplified Transfer of Ownership: Joint ownership can make the process of transferring the home more straightforward and less time-consuming for your heirs.
  3. Immediate Access: Your child can access the property immediately upon your passing without waiting for court approval.

The Cons of Adding Your Kids to the Deed

  1. Loss of Control: Once your child is added to the deed, they become a co-owner. This means they must consent to any future decisions regarding selling or refinancing the property.
  2. Creditor Risks: If your child faces financial issues, such as debt or bankruptcy, their share of the property could be at risk of being claimed by creditors.
  3. Tax Consequences: Adding your child to the deed may trigger tax issues, like losing the “step-up in basis” for capital gains tax, which can result in higher taxes if they sell the property after your passing.

Alternatives to Adding Your Kids to the Deed

If avoiding probate is your primary goal, consider alternatives that provide more flexibility and fewer risks, such as:

  • Revocable Living Trust: Placing your home in a trust allows you to maintain control during your lifetime while ensuring a seamless transfer to your child upon your passing.
  • Beneficiary Deed: Arizona law allows you to execute a beneficiary deed, which designates your child to inherit the property without probate while preserving your full ownership rights during your lifetime.

Consult an Estate Planning Attorney

Adding your child to the deed is a major decision with lasting implications. Consulting an experienced Arizona estate planning attorney can help you understand your options and choose the best path for your family. At Windrose Law Center, we’re here to guide you through every step of the process. Contact us today to schedule a consultation.

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