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| PUT YOUR KID'S NAME ON YOUR RESIDENCE DEED? One of the most commonly used estate planning devices in America is that of placing a child's name on a parent's deed. Scores of people have come in to discuss their estate plans ... and have reported to us that they had "solved" their estate planning problem by putting a child's name on the deed. Of course, we always asked exactly what they mean they have done; and, usually, we are told that they have placed the younger person on the deed as a joint tenant. Hence, if one party dies, the other is the owner. While this appears to be a wonderful solution to the (partial) estate plan, we generally discourage this tactic. If the younger person is ever a party to a lawsuit ... and if the court finds in favor of his opponent, the parent's residence may be in jeopardy. The parent's house may be attached, foreclosed upon and sold. The parent may be on the street. More often than not, parents reply to our admonition that their child is not one to get involved in lawsuits. Yet, there were 20,000,000 civil lawsuits filed in America last year. People who never dreamed that they would be a party to a lawsuit often find themselves deeply involved in litigation. Lawsuits, along with the likelihood of divorce, are two great reasons to not put your children's name on the deed. Similar care should be taken when putting children's names on major liquid accounts, ie. bank accounts and stock accounts. If your childrens' names are on those documents, as joint owners, their lawsuit could become your problem. So, our general advice is: Do not put your kids' names on your major stock or cash accounts. If you want to put one of their names on your checking account that you just pay the monthly bills from, that's all right. But be very careful about putting their names, as joint owners, on your major accounts. To accomplish your goal, while protecting your interests, you may want to use the Life Estate Deed, or "Pay-On-Death" Bank Account. |
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