Idaho Law Blog
Several times over the last year I’ve had clients talk with me about their Estate Planning. In the course of our conversations I have learned that some of my clients have taken the step of gifting their home to their child, either out-rightly or through a Deed as a joint tenant with a right of survivorship included. My clients have indicated that they feel like it is a good idea to either give their home away to their child or to have their name on the title of the home with them. Sometimes my clients believe that by doing this they have taken care of the home and don’t need to worry about it as part of their estate planning. Here are the 3 main reasons why it is not a good idea to either gift away your home to a child or to name your child as a joint owner on a home with you.
1. YOUR CHILD’S CREDITORS
This blog assumes that even after giving away your home or naming your child as a right of survivor on your home, you still intend to live there as your primary residence. The idea is that you preserve your right to live in the home while eliminating the need for a probate after you passed away. The first reason why this is not a good idea is that your child’s creditors would have an opportunity to take the home away through legal processes if your child owed them a substantial debt. Once you have gifted the home away to your child it is no longer your primary residence and is not protected by the Idaho homestead exemption.
2. YOUR CHILD AND DIVORCE
The second reason why gifting your home to your child is a bad idea is divorce. Assume for a moment that you give to the home away to your child and then a short time later your child is divorced. In this circumstance all property and Idaho that is obtained during a marriage is presumed to be a community property asset. This means your child will have to fight with their ex-spouse over ownership of the home that you are living in.
3. YOUR CHILD DIES BEFORE YOU DO
The third reason why gifting your home away to your child is a bad idea is that there is no guarantee that they will live longer than you do. Let’s assume for a moment that you gifted the home away to your child you intend to remain living in the home, but your child passes away. In this instance Your Child’s Estate as the owner of the property will have to be probated and a new owner will now take possession of the property. This new owner could be the your child spouse or it could be your child’s children by and through either a trustee or a guardian if one was set up in your deceased child’s estate.
There are better and easier ways to take care of transferring a home to your children. If you are concerned about avoiding probate, there are other estate planning mechanisms that can be used to accomplish this. If you have questions about accomplishing this, we can help. Call us toll free at 877-232-6101 or 208-232-6101 for a consultation with Lane Erickson and the Racine Olson team of Estate Planning attorneys in Idaho. You can also email Lane Erickson directly at lve@racinelaw.net. We will answer your Idaho Estate Planning questions and will help you solve your Idaho Estate Planning problems.
This website includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer for advice on specific legal issues.