Should You Quit Claim Your House To Your Children?

You should never quit claim your house to your children. Ever. I can’t think of a good reason why anyone would. Deeding your house to yourself and your children makes them joint owners. This is a very common probate avoidance technique in this area of Michigan and I see a lot of old-school lawyers still doing this but are the risks of avoiding probate worth the benefits?

What if your child files for bankruptcy? Did you know that your house may become property of the bankruptcy estate? And if they were sued, the creditor could put a lien on your house. If they don’t pay taxes, then the IRS could levy your house. If you want to sell or refinance it, then you will need their premission. Please note that all of these could happen to that joint bank account you put your child on, too.

These are just some of the bad things that can happen. I explain this to clients that come in who ask me to “quickclaim” the house to avoid probate. It’s actually called a quitclaim deed but since they think it is a fast way to resolve the problem as they see it, they call it a “quickclaim” deed.

Almost all decide against it when I explain that there are reasonable and cost effective ways to accomplish their goals without these risks. Some basic estate planning with a Last Will and Testament, a Medical Power of Attorney and a Financial Power of Attorney is effective. A Revocable Living Trust avoids probate and all of the above risks. A person could transfer the house using an Enhanced Life Estate Deed (Ladybird Deed) which reserves a life estate with the power to sell, transfer, lease or mortgage the real estate which I plan to explain later in a blog post.

These may sound complicated solutions but for an experienced estate planning attorney they aren’t. And every option is not right for every person. Once all of your estate planning choices are explained to you along with the the pros, cons, and costs, most people can decide very quickly what is right for them and what isn’t, like that quitclaim deed they first asked about.

Need a lawyer? Give me a call at 313-291-0240.

Chris McAvoy is a Taylor, Michigan  attorney and consumer bankruptcy  lawyer who helps people with bankruptcy, family law, and estate  planning.  To find out more or set up an appointment, click here for contact info. We help  people in Taylor, Allen Park, Southgate, Lincoln Park, Riverview, Trenton, Flat  Rock, Wyandotte, Brownstown, Belleville, Dearborn, Dearborn Heights, and the  Downriver, Michigan area.

 

About Christopher McAvoy

I've been a lawyer since 1997 and I've seen a lot. We should talk. Not only do I have a lot of the answers, I will share them with you so you can make up your own mind. Chris McAvoy is a Taylor, Michigan attorney who helps people with bankruptcy, family law, and estate planning. To find out more or set up an appointment, click here for contact info. Our attorneys help people in Taylor, Allen Park, Southgate, Lincoln Park, Riverview, Trenton, Flat Rock, Wyandotte, Brownstown, Belleville, Dearborn, Dearborn Heights, and the Downriver, Michigan area.