Should I put my children’s names on my real estate in order to avoid probate in Georgia?
This is a question I get all the time. I frequently meet clients who have already put their children’s names on their deed in order to make things easier when they pass away. It is true that having your children as co-owners on your assets avoids probate. Also, putting your children as co-owners of your property is fairly simple and can sometimes be done without an attorney. However, this is not something I recommend for a variety of reasons.
First, when you name your children as co-owners on assets such as real estate, they have as many rights to the property as you do. Although your children may be very responsible, upstanding citizens, many people fall on hard times unexpectedly. If your children were to file for bankruptcy, go through a divorce, rack up medical expenses or tax debts, those assets are theirs and are subject to those claims. Also, if your child is an owner of the property, he or she has as much of a right to sell it or live on it as you do. As you can imagine, this can create problems in some cases.
Also, there can be tax consequences to naming your children as co-owners of the property, both when you name them on the property, and when they sell it. It is typically much better from a tax perspective to give gifts at death rather than during life. In most cases, this will greatly reduce the amount of taxes they pay on the property when it is ultimately sold.
Finally, some people name only one child as a co-owner simply to make things easy, and they assure me that once they pass that child will share with the other children. However, legally that child does not have to share with his or her siblings. I hear a lot of horror stories about how much people change when there’s been a death in the family and how the money destroys relationships. You don’t want to let property drive a wedge between your children once you pass. Instead, I recommend letting everything pass through probate in most cases. Probate in Georgia can be simple, and it’s not worth the risks you take by naming a child as a co-owner of property simply in order to avoid probate.
Do you have any questions about probate in Georgia or how assets should be titled? If so, contact Cobb County estate planning attorney Sarah White at 678-453-6490 or email me at firstname.lastname@example.org. I would be happy to give you a phone consultation.