In the age of computers and mass information, people often think that legal advice is not always necessary. Take, for example, estate planning. In an effort to avoid probate upon death, people sometimes make the mistake of signing over the deed to their home to an adult child, grandchild, brother or sister or making that individual a joint tenant on the deed. While this will accomplish the goal of avoiding probate, it can have a number of disastrous consequences as well. Imagine the following possible scenarios.
Your child/grandchild/sibling is sued as a result of a personal injury accident and a jury awards a large sum to the plaintiff. Insurance does not cover all of the award. Your home could be liened and sold to pay off the award.
Your child/grandchild/sibling gets into debt and the creditors lien and sell the home to pay back the debts.
Your child/grandchild/sibling uses the home as collateral on a loan and them a catastrophe strikes and cannot pay back the loan. The lender then forecloses on home.
Your child/grandchild/sibling dies without leaving behind a valid Last Will and Testament and the home is left to his or her spouse. Do you trust this person to give you back your home or at least allow you to live in it?
Your child/grandchild/sibling is involved in a divorce. Legally, the home may be marital property and could be sold in order to divide the profits or awarded to the spouse instead of your child/grandchild/sibling.
Your child/grandchild/sibling may refuse to sell the property if you need the proceeds to pay for assisted living or long term care.
I recommend that you see a qualified estate planning attorney to discuss other planning options before you take your estate planning into your own hands and transfer ownership of your home to another.
- Myths We Tell Ourselves About Estate Planning - October 13, 2020
- Living Trusts Streamline the Estate Administration Process - June 8, 2020
- Estate Planning: Cover These Bases - May 20, 2020
