6 Reasons Not to Put Your Child’s Name on the Deed to your House

Instead of drafting a Will, many people just put their child’s name on the deed to their house.  Their goal is to make things easier for their child by eliminating the need to go through probate.  If the house is the only asset, this can be an effective way to avoid probate.  (If there are other assets besides the house which they still own in their sole name – their child will still have to go through probate.)  In Maryland, though, probate is not a particularly daunting or expensive procedure.  In my opinion, the disadvantages of putting your child’s name on the deed far outweigh the advantage of avoiding probate.

1.  Loss of Control

When your child’s name goes on the deed, your child becomes the legal co-owner of the house.  Should you at some point want to sell the house and move to Florida, your child must agree.  If they don’t agree, you cannot sell.  No Del Boca Vista for you!

2.  Inheritance by Others

If your child dies before you, depending on the way the deed is worded, your child’s ownership interest in the house could pass to their heirs.  You could end up owning the house with your son-in-law.  Definitely no Del Boca Vista for you!

3.  Exposure to Creditors

Because your child is now a joint owner of your house, your house is also your child’s asset.  Your house is now exposed to your child’s creditors.  If your child runs into tax problems, a tax lien could be filed against your house.  If your child declares bankruptcy, your house may have to be sold.  If your child is sued as a result of a motor vehicle accident, your house could be attached.

4.  Taxable Gift

Putting your child’s name on the deed may seem like a simple transaction, but it is legally a gift of half the value of your house.  If your house is worth more than $26,000, a federal gift tax return is required to be filed.

5.  Capital Gains Tax

When you put your child’s name on the deed, the child is considered to have acquired their half of the house at half of the same price you paid for the house.  Let’s say that the house you paid $100,000 for 30 years ago is now worth $500,000. (Now that’s wishful thinking!)  Your child now owns half the house and is considered to have acquired it for $50,000.  After you die, if your child sells the house for $500,000, the child will have to pay capital gains tax on the half of the house they acquired before you died.  In this scenario your child would owe capital gains tax on $200,000.  (This assumes the house is not your child’s primary residence.)

Conversely, when your child inherits the house after your death, they take the property at your date of death value.  Even though you only paid $100,000 for your $500,000 house, your child is considered to have acquired the property for $500,000.  Thus, if your child then sells the property for $500,000, there is no capital gains tax.

6.  Medicaid Penalty

Medicaid is a quasi state/federal program that will pay for nursing home care for individuals without sufficient resources.  In the application process, Medicaid looks for whether the individual has given money away in an attempt to become eligible for benefits.  Putting your child’s name on your deed is considered a gift and as such may trigger a period of ineligibility for Medicaid benefits.

David Galinis
Managing Partner – Estates and Social Security Practice
Berman, Sobin, Gross, Feldman & Darby, LLP
481 N Frederick Avenue, Suite 300
Gaithersburg, MD 20877
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41 Responses to 6 Reasons Not to Put Your Child’s Name on the Deed to your House

  1. Maria Theesen says:

    Michael: Look at the pit falls if I deed the house to you. I’m going to check with William Hoag at Newamerica funding and see if there is a way to refinance and put in your name.

  2. mary says:

    My mother has my sister and myself on the deed to her town house. She is selling it and moving into a an apartment. We signed off on the P&S so she could sell it. Now it seems there is a question on whether we would be hit on taxes after it is sold because we are on the deed. She is waiting to hear if we need to be removed from the deed. Any advice?

    • dgalinis says:

      Dear Mary,

      Thank you for your comment. You and your sister may have to pay capital gains tax. I assume that you and your sister are not living in the house. Therefore, any gain (selling price greater than your mother’s original purchase price) will be a capital gain to you and your sister. I also believe that your mother may also be subject to tax because the exclusion for principal residence may not apply because you and your sister are also on the deed. Thus, I agree that you should consider removing your and your sister’s name from the deed.

      This is a good illustration of a 7th reason not to put your child’s name on the deed to your house.


  3. Paul says:

    My grandfather and grandmother bought a house in the 1960’s and put all 5 of their children on the deed, 7 people all together. My grandfather has passed and my grandmother still lives there. 3 of the children currently live there and another plans on moving back in after retirement.

    If that was their primary house of residence for the past 5 years & they sold it at a later date, would they have to pay capital gains on it?

    • dgalinis says:

      Dear Paul,

      Thank you for your comment. The owners who have lived in the house for the past 5 years can claim an exclusion of the first $250,000.00 of capital gain. The owners who do not live in the house are subject to taxes on their capital gain.


  4. adolly says:

    Should i make a trust for my property in order to avoid probate? If so, how do I do that?

    • dgalinis says:

      Thank you for your comment. A revocable living trust, drafted and funded properly, can avoid probate. You would need to consult with an estate planning attorney in your state. If you live in Maryland, feel free to contact me.

      As to whether your primary estate planning goal should be to avoid probate is another matter. In Maryland, the probate process is not something to be avoided at all costs as it may be in other states. As a result, it is rare that I recommend this type of trust in my practice as it is more expensive and complicated on the front end.


  5. Kathy says:

    My mom had changed her deed in the name of us 5 children, advised by her attorney to save inheritance tax? Not sure why, but now she has moved to a senior apartment complex and we want to sell the house and give the money back to her for her expenses. How can we avoid income tax for the 5 of us? Can we or should we put the deed back in her name before we sell?

    • dgalinis says:

      Dear Kathy,

      Thank you for your comment and I apologize about the late response. If you sell the house for more than your mother originally paid for it, you and your siblings will pay capital gains tax. If you put the house back in your mother’s name, you are required to file a federal gift tax return if each share of the house is worth more than $14,000. As there may be other issues involved (e.g., Medicaid eligibility), I would consult with your attorney before proceeding. If you no longer have counsel and live in Maryland, you could certainly contact us.


  6. kimyen says:

    My New Jersey property was given from my ex after divorce and it is my only real estate and mortgage was paid off . I have been living with no job since hurricane Sandy and in desperate financial hardship with the the huge hospital debt and many potential liens on my property, so I want to prepare to avoid losing my property in the near future.
    Therefore I want to add to my deed my minor child 10 years-old with 1% of the value of my property during her joining ownership with me and 99% of the value of my property for my daughter at any time of closing sell of the property and 100% at my death. The decision of selling the property remain on my decision at all time before my dead.
    Please help me for these questions below as soon as possible that I could have enough time to avoid the liens from creditors.

    1. Can I use “Lady Bird Deed” or Quit Claim Deed in this case ?
    2. Can my “minor” children be added on the deed ? Is it legal according to NJ law?
    2. Is there any “TAX PROBLEM” for doing so in the long run ? Any downside for that strategy?
    3. If after my daughter on the deed, there was any lien to the property due to the hospital cost, could I avoid that lien with only 1% of the property (value $234,000 property tax value) and could save the house for my children ?
    4. Can I be a guardian for them in case I sell the property while she is still a minor? If not then how can I sell without their consent ? Can my ex be her guardian in this case (he is primary custody after divorced as I could not afford for my children’s
    living ?
    5. If later I wanted to reverse to take off her name of the deed for easier to sell the property, is it possible or illegal to do so ?

    Thank you so much in advance for any help could be made ! I appreciate your help with all respect !
    Sincerely yours.

    • dgalinis says:

      Thank you for your comment and I apologize for the delayed response. Unfortunately, I am not licensed to practice law in New Jersey (only Maryland, Virginia and the District of Columbia). You need to consult with an attorney in New Jersey.


  7. Kellie Pagan says:

    Dear Mr. Galinis:

    My father wants to make a gift of $250K to my husband and I so that we can buy our first home. He’s then going to loan us approximately $300K for the rest of the purchase, with the mortgage being signed at closing. My father’s name will not go on the deed, and my husband and I file a joint income tax return.

    My question is: are my husband and I going to be liable to report the $250K gift as income?

  8. Please Help says:

    Hello David, I hope this blog is still active. I have a question that I have googled about a 10000 different ways but can’t find the anwser. A friends mother passed away and split all her assets equally in the will between all children… But one of the children is not on the deed to the house. (We are not sure why)… Does the will override the deed? Is this non included child entitled to any of the house?

    • dgalinis says:

      Thank you for your comment. The Will does not “override” the deed. The Will governs what happens to property owned by your friend’s mother solely or as tenants-in-common. So, if your friend’s mother owned the house in her sole name, the Will would govern what happens to the property. The Will would also control what happens to your friend’s mother’s share of the property if she owned it as tenants-in-common with other people. This is rare. The more common form of joint ownership is called joint tenancy or joint tenants with right of survivorship. If your friend’s mother owned the house with some of her children as joint tenants , then the Will has no bearing on the house as the joint tenants become the rightful owners immediately at your friend’s mother’s death. The Will would have no effect.


      • Please Help says:

        So happy you responded. Unfortunately, That is what I thought regarding the will/deed….I knew (but hoped I was wrong) that the will would triumph. In recent developments it has been found that “supposedly” one sibling (evil, clearly) manipulated a grieving mother into excluding said sibling from house when father passed. Does this believed manipulation have any standing in court? (there are family members who the mother opened up to about her financial/fraud worries before passing due to executor)…in addition, there is suspected theft from legal guardian/executor (my friend is considering a forensic accountant).

        All in all, is he (for lack of better terms) screwed? Should he cut his losses and cease attempt to concur?

        • dgalinis says:

          If your friend resides in Maryland, he or she could potentially bring an action asserting that the sibling exerted “undue influence.” However, these types of cases are often difficult to prove. I don’t have enough information to give legal advice on your friend’s situation. I suggest your friend contact legal counsel in the state he or she resides.


  9. Scott says:

    In June 2012, my mother in Salisbury (MD) died. Right before she passed, as an only child, the house was deeded to me. She and my father lived very modest lives and he predeceased her. They did not have enough income to file income tax returns for more than 15 years.

    The attorney that did the deed said my only tax consequence would be paying the state sales tax on real estate when I sold the house (I asked multiple times). The house sold in February 2013. for $59,000.

    Now I am concerned that the advice we got from the attorney was wrong and that I may have to pay capitol gains tax on the sale and possibly a federal gift tax return should have been filed in 2012 with some tax liability for my mother.

    She had no other assets other than her bank account and I had been listed on her bank account for years.

    I live in Missouri, so any insight you can provide would be most appreciated.

    Thank you.

    • dgalinis says:

      Dear Scott,

      Thank you for your comment. I apologize for the late reply. When your mother “deeded” the house to you, your mother made a gift to you. A federal gift tax return was probably required to be filed by your mother when she made the gift. However, based upon the information you provided, it is doubtful that any federal gift tax was due. There is no Maryland gift tax. You may have been subject to capital gains taxes when you sold the house, if the price that your mother paid for her house was less than the sales price. I suggest you discuss this with your accountant.


  10. Louis says:

    I have a question, about my home in queens NY my mom is 85 and i’m 55 and we both own our own homes, but I was looking to put my name on here deed with her. I’m the one who been doing all work needed as I’m the one who been maintaining it for a long time. my dad and her purchased the house for $1500 back 50 years ago. The house is worth about $300,000 and we both are on star for lower property tax to our incomes being below the star requirerments. Is there a beter way of doing this? I was told I should put both homes into a corparation under a new names as we are both the holders of the corp. thanks Louis

    • Jeff Gordon says:


      I want to thank you for your comment on the blog article “6 Reasons Not to Put Your Child’s Name on the Deed to your House.” My name is Jeff Gordon, and I am an associate attorney with Berman, Sobin, Gross, Feldman & Darby LLP with offices in Maryland, the District of Columbia and Virginia. Please understand I am not a licensed attorney in the state of New York and you should not rely on this response as legal advice. I recommend you speak with local counsel in New York before taking any action regarding this unique issue you have presented.

      Before doing anything, you and your mother should sit down and determine what are each of you really trying to do with the properties? Are you looking to avoid probate? Are you trying to minimize current tax liability? Future tax liability? Once you and your mother both have an understanding of what it is you want to achieve, then I recommend each of you sit down with a local attorney to decide on the best option for planning for the disposition of the property and the consequences that may result.

      Please take a second look at Section 3 (Exposure to Creditors) and Section 5 (Capital Gains Tax) of the blog in which you responded.
      By becoming a joint owner of the property, you expose your mother’s property to any of your creditors. Additionally, by having your name added to the Deed, your basis in the property will be the same as your mothers at the initial purchase ($1500), thereby making you liable for a substantial capital gains tax if the property is ever sold.

      If you and your mother decide to contribute your respective properties into a corporation, I am concerned that the transfer might disqualify you from the STAR program for failure to meet the eligibility requirements. Take a look at The New York State Department of Taxation and Finance STAR webpage located at http://www.tax.ny.gov/pit/property/star/eligibility.htm. The website provides some helpful information regarding the STAR program to help you and your mother avoid taking any action that may cause you to lose the right to the exemption.

      Proper planning can minimize costs without affecting the STAR Program exemption statuses of you and your mother.

      Thank you again for your question.

      Jeffrey K .Gordon, Esq.

  11. debbie says:

    my mother has left her house to me and my sister she is first on the deed then me does that give her the right to sell it or force me out of the house we both live with my mom right now but once she passes away where do i stand

    • Dear Ms. Barger:

      Thank you for commenting on the Wills for Working Families blog article “6 Reasons Not to Put Your Child’s Name on the Deed to Your House.” I am an attorney in the Estates and Elder Law practice group and it appears as though you have the following questions:

      1) When your mother passes away, could your sister could force you out of the home?
      2) Could your sister sell the home you both share when you both are listed on the deed?

      Initially, you mentioned that your sister was named first on the deed. The order of names on the deed does not determine the rights of the individuals named. Therefore, to determine your rights you must look to the deed to find out how the property is titled. There are two common forms of ownership, called joint tenancy and tenants in common.

      Determining Joint Tenancy and Tenants in Common
      If the deed to your mother’s property says “joint tenants,” “jointly,” or “joint tenants with rights of survivorship,” you have a joint tenancy. In this situation, you and your sister own the home in equal shares (i.e. 50%) and with rights to possess the whole property. If the deed simply lists two or more people then it is presumed that they are “tenants in common.”

      Transfer of Property Upon Your Mother’s Death
      The distinct difference between a joint tenancy and a tenant in common is the right of survivorship. Under a tenancy in common, if your mother is still named on the deed when she passes away, your mother’s interest will pass under her Last Will and Testament, or to her heirs at law if she does not have a Will. Therefore, if your mother has no estate plan and there is another heir or if your mother devised her interest in the home to someone else they too will have rights to the property.

      Under a joint tenancy, when a person passes away, their interest is divided among the surviving joint tenants. Therefore, the remaining co-owners become owners and your mother’s interest in the property is automatically transferred without the need for probate, no matter how your mother directs the property to pass in her Will, if she has one.

      Access to Property
      In both types of ownership, you each have equal rights to the entire property. Thus, you each have a right to equal access to the entire property and neither of you can deny the other access to the property. Therefore, your sister could not force you out of the home.

      Sale of Property
      The same procedure for selling the home applies to both a joint tenancy and tenants in common. If you both cannot agree to sell the home, the person that wants to sell can only sell their interest in the home. In your situation, if your sister found a buyer who wanted the entire home and you did not agree, your sister could petition the court for a forced sale, which would involve the sale of the whole property. Alternatively, your sister could also file a partition suit, seeking the courts assistance in dividing the home, selling only her interest and you would receive a profit of sale that is relative to your interest in the property. However, for practical reasons, a partition suit is most common with land than with a home.

      Nicole A. Slaughter

      As you know, you have not retained us for assistance with this matter. Thus, my responses to your question do not constitute legal advice and do not create an attorney client relationship. If you need further assistance please feel free to contact me.

  12. Carol C says:

    will a nursing home take my house if my children are not on the deed?

    • dgalinis says:

      Dear Carol,

      Thank you for your comment and I apologize for the late reply. Your question is a little confusing. Generally, nursing homes don’t take people’s houses. In Maryland, if Medical Assistance (i.e., Medicaid) has paid for your nursing home care, they may assert a lien against your house. They do not “take” your home, but have a right to be repaid what Medical Assistance paid on your behalf when the house is sold.


  13. Abbey says:

    My friend has a home and want me to take over the payments and she just walk away from it. Should I have her add me on to the deed if I agree to take it over the loan in the event of her death. And should we notify her mortgage company?

    • dgalinis says:

      Dear Abbey,

      Thank you for your comment and I apologize for the late reply. If your name is not on the deed you have no legal right to the property. In order for you to be on the deed, you will be required to not only notify the mortgage company but get their consent. Most likely, the mortgage company will only agree to this if you qualify and agree to execute a new mortgage.


  14. Patti says:

    We have a home that we bought for our son. We have a mortgage and he pays it. He is on the deed with us. If we sell it for a profit and he turns around and buys another home, do we have to pay capital gains? We paid $63,000 and are asking $120,000. He is looking at buying one for about $120,000.

    • Dear Patti:

      Thank you for your comment. I am an attorney in the Estates and Elder Law practice group. You asked whether you will have to pay capital gain taxes for the home you purchased for your son.

      Yes, you will have to pay capital gains tax on any amount over the original purchase price. In this scenario, if the home was purchased for $63,000 and if you sell the home for $120,000 and assuming there are 3 people on the deed, you will each will have to pay tax on the capital gain of $57,000.

      However, the owner who has resided in the home for the past 2 years out of the previous 5 years before the sale, and did not claim the exclusion within the prior 2 years may exclude up to $250,000 of capital gain. Therefore, if your son is the only owner residing in the home and meets the requirements, he may exclude his share of the capital gains tax.

      As you know, you have not retained us for assistance with this matter. Thus, my responses to your question do not constitute legal advice and do not create an attorney client relationship. If you need further assistance please feel free to contact me.

      Nicole A. Slaughter

  15. Pam says:

    My daughter has lived in my house as a renter for 3 years. I now want to either give her the house or put her on as a joint owner. What are the tax consequences for me and for her? What do you advise is the best way to give her a secure home? (I have my own home where I live and do not depend on this other house for any future gain.)

    • Jeff Gordon says:

      Dear Pam –

      Thank you for your comment. Based on the limited facts provided, I cannot properly advise you on the relevant tax consequences that might be involved with a transfer of ownership to your daughter.
      There are a number of methods to consider using when transferring an ownership interest in the property to your daughter (sale, gift, bequest, Trust, business entity ownership, installment agreements, and etc.). The potential tax consequences for both you and your daughter will depend on the method chosen. One method may greatly impact your present income tax liability, while another may only minimally impact your present tax liability while opening the door for your daughter to face a harsh tax liability down the road.
      If you simply wish to gift the property to your daughter outright or as a Joint Owner during your lifetime, please take a second look at the blog article “6 Reasons Not to Put Your Child’s Name on the Deed to your House”, specifically, sections 4 and 5. These paragraphs provide a brief overview of the potential tax consequences associated with “gifting” the property to your daughter.
      I would recommend you sit down with a tax professional in your area to determine the goals you wish to achieve by transferring the property to your daughter. If your main concern is minimizing tax liability and you are located in Maryland or the District of Columbia, please feel free to contact my office at (301) 670-7030 to sit down and discuss your options.

      Kind Regards,
      Jeffrey K. Gordon, Esq.
      481 N. Frederick Avenue Suite 300
      Gaithersburg, Maryland 20877

  16. Annie alvarez says:

    My mom just passed away 4 sisters on deed 2 passed away but one sister had 8 children do we been to pass there mom’s portion

    • Jeff Gordon says:

      Dear Annie –
      Thank you for visiting the blog and providing your comment. I am an attorney with our Estates and Elder Law Practice Group. We represent clients throughout Maryland and the District of Columbia.

      The issue you have presented depends on how the property is titled and where the property is located. Based on the facts you provided, it seems that you and your sisters were all included on the deed as Co-owners. How the deed categorized the owners will control whether your sister’s children are entitled to an interest in the property.

      The use of the term “Co-owner,” is a bit misleading. These Co-ownership interests are actually considered concurrent estates or Co-tenancies. In your situation, there are two types of Co-tenancies in play: Joint Tenancy with Right of Survivorship and Tenancy in Common.

      Joint Tenancy with Right of Survivorship
      If the deed to you and your sisters includes the words “Joint Tenants,” “jointly” or “with Rights of Survivorship,” then you most likely have a Joint Tenancy with Right of Survivorship. In Maryland, the deed must state the words “with rights of survivorship” to create a valid Joint Tenancy. Assuming the deed creates a Joint Tenancy with Right of Survivorship, then after one owner dies, his or her interest in the property will cease and the remaining owners’ interests in the property will increase.

      Applying Joint Tenancy to your situation, each sister was given a 25% interest in the property at the creation of the deed. Upon your sisters’ deaths, you and your sister now have a 50% interest in the property. Therefore, your deceased sister’s children do not have any interest in the property.

      Tenancy in Common
      If the deed did not create a Joint Tenancy with Right of Survivorship, then a Tenancy in Common was created. Each owner holds a percentage ownership in the property that is freely transferable. You can sell the interest, give it to your children during your lifetime or at your death, etc.

      Applying Tenancy in Common to your situation, upon your sister’s death, her 25% interest is split among her heirs. Therefore, you and your living sister now share ownership with your sister’s heirs. This also applies to anyone who inherited from your other deceased sister as well.

      Final Thoughts
      Before taking any action, you need to review the deed in relation to the real property statutes of the state in which the property is located. If certain language is required to create a specific type of ownership, the inclusion or exclusion will control which type of ownership was created.

      Jeffrey K. Gordon, Esq.

      • Annie alvarez says:

        From California the deed has all names nothing else

        • Jeff Gordon says:

          Annie –

          As I am not licensed in California, I cannot advise you on California law. I recommend you speak with a real estate attorney located in California. He or she will be able to clearly identify the type of ownership created by the deed and answer any other questions you might have regarding the property. Thank you again for your comment.


  17. nali says:

    my dad died and the house is on my mums name but if my mum dies what rights do we five kids have

    • dgalinis says:

      Thank you for your comment. Please see Ms. Slaughter’s response to a comment on this blog dated 4/25/14 for an in depth analysis of the various ways that the house can be distributed based on the language in the deed.


  18. novatn says:

    If we are purchasing a home with cash, in a state other than our own, and include our adult child’s name to the deed (this would be her main residence), wouldn’t this allow our child to inherit this property without probate? Also, if she wants to purchase our shares of the home completely, would this not make for an easier transfer of sale, that is if we hold her mortgage?

    • Jeff Gordon says:

      Dear Novatn,

      Thank you for your comment in response to the blog article “6 Reasons Not to Put Your Child’s Name on the Deed to your House”. The simple answer to your first question is Yes. By simply titling the property to include your adult child’s name on the Deed you can effectively avoid probate. Please take a look at the article to which you responded titled “6 Reasons Not to Put Your Child’s Name on the Deed to your House” for a discussion on the issues associated with adding your child’s name to the Deed.
      In regard to your second question, there are many factors associated with advising on this type of matter which are outside the scope of this blog article. Before you take any action, I would recommend speaking with an attorney licensed in the state where the real property is located. If the property is located in Maryland, feel free to contact my office at (301) 670-7030 to discuss the proposed transaction.

      Kind Regards,

      Jeffrey K. Gordon, Esq.

  19. Father passed away leaving 5 adult children on the deed as joint owners. One of the siblings currently resides in the home with her husband who cared for the father until his death. There is another sibling that has a spouse. All siblings want to sell the home and divide equally. My question is do the two spouse have any say on what happens to the property and can a older sibling get a reverse mortgage and buy the others out and retain the home. The home is paid for and there are no liens on the property but one or more of the siblings may have liens against them.

    • Jeff Gordon says:

      Clarence –

      Thank you for your comment. Please note I have limited my discussion to ownership by Joint Tenants with Right of Survivorship. In the event Tenancy in Common is involved, please speak with an attorney licensed in the state where the property is located.

      Regarding the use of a reverse mortgage to buy out the interests of the other owners, the answer is yes. If one of the owners wishes to specifically buy the interests of the other owners, he/she is free to do so. A reverse mortgage or refinance can achieve this goal. The main potential problem will be making sure that the other owners consent to creation of the mortgage. As the loan obligation will be secured by the property, all of the owners must agree to create the loan. Only one person may actually be obligated on the loan, but the other owners must consent to the lien being placed on the property.

      As for your question about the spouses, unless the spouses are on the title as owners, the spouses do not have any rights to the property. The only people who can consent to the sale or authorize a lien to be placed on the property are the owners of record. In your situation, the owners of record appear to be the five siblings that are now joint owners.

      I hope this discussion is helpful. If you are located in Maryland or the District of Columbia, please feel free to contact me directly if you wish to discuss in further detail.


      Jeffrey K. Gordon, Esq.

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