How should you title your home?
The best way to title your homeCarefully evaluate which form of title is right for your situation. "Ask yourself: Who do I want to end up with my interest in this property?" says Polomis. "Do I want it to be the person with whom I own it or someone else?"
If you're married and want your interest to pass to your spouse upon your death, joint tenancy is probably the best solution. But there are drawbacks. "Maybe you or your husband have credit issues," says Polomis. "You might not want the person with debts to be on the title at all."
That may also be true if one spouse has a high-liability occupation. "If one of you is a doctor or lawyer with the risk of malpractice claims, you may want the spouse not at risk to own the property," says Drewes. "Then the target of potential lawsuits has no legal interest that can be pursued by creditors."
Joint tenancy may also be unwise if you have a complicated family history. Perhaps you're married, but not for the first time, and you have children from a previous marriage. "You may want to title your home as tenants in common so that when you pass, your interest goes to the beneficiaries of your estate," says Blanch. That reasoning may also be sound if you're divorced with children, but own a home with a new partner.
Think very carefully about adding someone other than your spouse as a joint tenant. Parents sometimes add an adult child thinking the property transfer upon their death will be simpler. Before you do that, speak to a tax adviser because your children may lose important tax benefits.
The tactic carries other risks, too. "What you may not be considering is that if your son Johnnie is a joint tenant, Johnnie's creditors can come after your property," says Polomis. "And if Johnnie and his siblings don't get along, he can file the affidavit of survivorship and stick his tongue out at everyone after your death. He goes on his merry way with the property solely in his name even though everybody knows that's not what you intended."
How to change your titleChanging how you've titled your property is relatively simple and inexpensive, but it's not for the uninformed. "In Minnesota, you can get free forms, and recording a new deed is just $46," says Drewes. "But it's risky to attempt the transfer of title without the advice of a lawyer or other professional. You may need to use particular words in your deed, and there may be tax implications. Get advice because there can be so many unexpected results."
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