Can I put my Kids Name on the Title to Avoid Probate?

Can I put my Kids Name on the Title to Avoid Probate? (1)

Can’t I Put my Kids Names on Everything to Avoid Probate?

 

Do I need a Living Trust?  Can’t I use beneficiary designations to avoid probate?  Well, some people don’t need a Trust because their estate is fairly modest.  For example, for those whose estate is less than $150,000, a Trust may not be necessary.  This is especially true for those that do not own real property.  The heirs of those with assets less than $150,000 can take advantage of California’s affidavit process and avoid probate. 

 

Many things a person owns should not be put into a Trust in order to avoid a taxable event such as IRA and other retirement accounts.  These assets are best handled by contacting the plan administrator and designating who should have the asset on your passing.  This is a called making a beneficiary designation.  Other assets like bank accounts, life insurance and cars can be put in your kids or spouses name to avoid probate.

 

Where things get sticky is when we discuss real property and probate avoidance.  For married couples that own a community property home, title can be held in such a manner that the property will automatically pass to the surviving spouse upon the first to die.  Community Property with Right of Survivorship is one way to accomplish this.  The other title designation that can pass property upon the first to die is Joint Tenancy with Right of Survivorship.  The problem with stopping the analysis here and determining that no Living Trust is needed is the possibility of simultaneous death of both spouses.  Another reason to consider a Revocable Trust is incapacity of one or both spouses.  A Trust allows a successor trustee to manage the property and affairs of the Settlor (the person that creates a Living Trust is called a Settlor or Trustor) should they lose capacity due to Alzheimer’s or other form of dementia. 

 

 

The most important reason to create a Trust and not put your kids name on the title to your home is that:

  • Putting your kids on the title could also trigger Capital Gains Tax
  • Putting your kids on the title to your house will likely trigger a gift tax
  • Putting your child on the deed to your home makes them a co-owner of the home, and now you must have their consent to sell or re-finance your own home.
  • Inheritance by your child’s heirs is also a possibility which means that if your child dies before you do, you may co-own the home with someone you never considered.
  • Putting your kid on the title to the home also creates exposure of your home to your child’s creditors.  This means if the child gets sued, or has tax problems, or the like, the house may be used to satisfy the obligation.

 

So you see that the cost of a Revocable Living Trust is far more affordable, and a superior method to manage your estate and affairs.  Call me today and we can start planning.

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

Thanks for reading my blog.

 

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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