Think – Before You Add Someone Onto Title
by Tina Triano, Esq.

In preparing estate plans, it is not unusual for me to find older individuals who, for one reason or another, have placed one of their children or a new spouse onto the title of their real estate. Many individuals believe there is little harm in this procedure, but it can become a large problem after your death.
When adding someone on title to your real estate, first consider if the transfer will trigger transfer taxes and/or a reassessment of the real property taxes. In cases with a parent adding a child, or a person adding a new spouse, this trigger will not be pulled—but you must fill out a claim form with the county assessor to prevent reassessment. In cases where you are adding a person who is unrelated to you, the transfer tax and reassessment will usually attach. The problem is that you won’t find out about the reassessment until months after you have added the person onto title.
A common occurrence is a person deceased who, prior to death, added one of their children onto title of a house for “convenience.” I do not usually step into this scenario until after the parent has passed away and have yet to determine what benefit the deceased felt they would receive from the addition of a child onto title. In my experience, it appears the child on title held sway over the parent and convinced them it was necessary for one reason or another. Recently, I had the opportunity to see this influence in action when an entire family consisting of the surviving mother and five children sat down with me to express their concerns regarding the pressure one of the children was exacting over their mother. Specifically, one of her sons was trying to convince her that it would be a good idea for her to deed her house, in its entirety, over to him. Had this occurred, all of the other children would be disinherited from any interest in mom’s house upon her death.
If you have more than one child and you add only one child onto title with you, you most likely will accidentally disinherit your other children from an interest in the property. If that was your intention, then so be it. However, in most cases, this was not the intention, but the deceased is no longer here to express their position and the other children have nothing to prove that was not their parent’s intent.
Another common occurrence is the parent with grown children who has remarried. After the marriage, they add their new spouse onto title. If added as a joint tenant, the parent has just disinherited his or her children from any interest in the property. If added as a tenant in common, you have disinherited your children from at least half of the property. Once again, this is fine if it is what you intended. When children come to me regarding title problems after someone has died, I must remind them that without a written document or estate plan, we have very little to prove what the actual intention of the deceased parent really was and it can cost thousands of dollars trying to prove mom’s or dad’s intent. I regularly oversee the administration of trusts in my practice. During administration proceedings, I have had cases that have had to go to court over disagreements between siblings. I do not practice this type of litigation, but have frequently seen costs of this in-fighting to start at $30,000. This is not productive for anyone but the litigation attorneys.
Also consider that if you add a child onto title with you, you expose your property to the debts and liabilities of your child. For example, if your child is in a car accident, your child may be sued for damages and your house will become a target. If your child files a bankruptcy, your property could be affected. If your child owes a creditor and is sued, the judgment could attach to the title of your house.
This information also pertains to bank accounts and other monetary assets. A parent will take one of their children down to the bank with them and add the child onto title so that the child can help the parent pay their bills. In some cases, I have seen parents with arthritis so severe that this is a necessary function. Once again, if this is your intent, you are fine, but I find this exercise usually serves to disinherit other children from the account. You do not have to add someone onto title of your bank account to give signature authority.
Think carefully before you add children to the title of any of your assets because it will affect how the asset is treated if you pass away. Proper estate planning with an accurately prepared Durable Power of Attorney can avoid any inconveniences you feel are of concern.

~Tina Triano is a California Attorney & Real Estate Broker with over 20 years of real estate contract/loan experience and over 15 years of estate planning including the implementation of capital gains tax avoidance methods. Tina is regularly a guest speaker in the real estate community. You can reach her at 408 425-7953 (appointment line) or email her at ahba@garlic.com.