I am often asked if it is wise to put your child’s name on the title to the family house in order to avoid paying probate fees on the value of the house which are approximately 1.4%.
Generally I do not advise my clients to put their children’s names on the family home as there are several negative implications which could arise. For example, once your child’s name is on the title that child owns part of the house and if they are sued in a divorce or other legal proceeding their interest in your home may be in jeopardy.
If a parent does wish to transfer the family house into joint tenancy with a child it is important for the parent to clearly set out their wish that the child receives the property as a joint tenant on their death and the child has no obligation to share the home with their siblings. If they simply register the title to their home in joint tenancy there may be some confusion later regarding whether this was done simply to avoid probate fees or whether it was intended as a gift.
There are two legal principles which could apply in this situation. One is the presumption of advancement that states that the onus is on the party opposing the transfer to show that the donor did not intend to gift the property to the donee.
The second is the presumption of a resulting trust which may apply if there is evidence that the donor did not intend to gift the property to the donee.
A statement in a will or in an ancillary document which is signed by the will-maker can help provide evidence of the testator’s intention after their death.
Deborah A. Todd
