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Thinking of Adding Your Kids to Your Home Title? Think Twice!

June 26, 2025 | Posted by: Kiruban Kana

Many homeowners consider adding their children to their property titles to simplify estate planning or avoid probate fees. However, this seemingly simple step comes with significant, often unforeseen, risks and misconceptions that could lead to major headaches down the road.

Why extreme caution is advised:

  • Tax Traps: It's not just about avoiding probate. You could face unexpected capital gains tax if the property isn't truly a gifted principal residence.
  • Creditor & Divorce Risks: Your home could become vulnerable to your child's creditors or claims in a divorce settlement.
  • Unequal Inheritance: What seems fair now might not be later, leading to family disputes if asset values change differently over time.
  • Loss of Control: As a co-owner, your child's consent may be needed for future mortgages or sales, potentially limiting your own financial flexibility.
  • Jeopardized Future Benefits: Adding a child to the title could impact their eligibility for first-time homebuyer benefits.

As experts emphasize, probate avoidance is just one factor and shouldn't drive your entire estate plan. What's right for your neighbor isn't necessarily right for you.

Key Tips Before Making a Decision:

  1. Define Your Objectives: Understand why you're considering this step.
  2. Seek Comprehensive Advice: Consult with tax advisors, estate lawyers, and financial planners before making any changes.
  3. Document Intent: If a gift is intended, ensure it's meticulously documented to avoid future challenges.
  4. Communicate with Family: Have open discussions with all children involved to ensure everyone understands the implications and is on the same page.

Don't let a misunderstanding jeopardize your financial future or family harmony. Professional guidance is essential!

#EstatePlanning #RealEstate #Homeownership #FinancialPlanning #Probate #TaxPlanning #FamilyFinance

Source: Jonathan Got via Advisor.ca (June 25, 2025)



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