#19 of 25 Estate Planning Mistakes – Children on Deeds

Putting Child’s name on Deed
A common estate planning method, and a potentially costly  mistake, is adding your children to the deed on your home as co-owners with rights of survivorship. While this step will avoid probate, it also has adverse tax consequences. Since your children received part of the home’s value as a gift, they will owe more capital gains taxes on its sale than if they had received it as an inheritance. Your home also becomes exposed to the debts and liabilities of the new co-owner, your son or daughter, including those caused by a divorce. In some states, creditors can force the sale of the home to get the child’s share.