Parents and guardians often want to pass on an inheritance, but the process can be quite tricky. Because of title complications and potential divorce or bankruptcy problems, some parents are putting their assets at risk when they put their home in their son or daughter’s name.
What Are the Risks of Putting Your Home in Your Child’s Name?
There are a few potential problems that could arise if you put your home in your child’s name. First, if the child was to go through a divorce, the home could be at risk of being split between the child and ex-partner. A messy divorce can leave your home vulnerable and result in a complex legal process over ownership.
Additionally, if your child were to experience financial difficulties, such as credit card debt or medical bills, your home could be at risk of being seized by creditors. Bankruptcy is another potential issue, as your child’s creditors could force the sale of the home to get their money back.
Finally, if you put your home in your child’s name and he was to die before you, the home may not be passed back to you, which could be a problem if you were hoping to transfer possession to other members of your family.
For these reasons, it’s helpful to speak with an estate planner before you put your home in your child’s name. An estate planner can help you weigh the pros and cons and determine whether this is the right decision for you and your family.
At NaickerCPA, we understand the importance of protecting your assets. We can help you create a comprehensive estate plan that accounts for all your assets. Contact us today to schedule a consultation.
If you have any questions about this article or business taxes, in general, or you want to make an appointment with an accounting professional at Naicker & Associates, please contact us at (604) 469-9369. We are based in Port Moody, BC.
