All Things Title

What are the issues with adding a minor child to a real estate title?  It seems like an easy way to let children inherit real estate.  

First, once on the title, it is very difficult to refinance or to convey the title out of the child’s name. Any deed signed by a minor is voidable, and parents may not sign on behalf of their children.  

To convey the title out of a child’s name, the court must appoint a conservator to represent the child’s best interests. It is often not in the child’s best interest to sell the house, refinance, or convey the title back to a parent.  

The only other option is to wait until the child is legally competent (18 years old in most states) and have the child sign a deed then.  

This is another reason to have a clear and concise will describing how you want your heirs to inherit your assets.  Adding children to the title can waste a lot of time and money that would be better spent making a proper estate plan instead. 

John C. Bennett is a real estate closing attorney and owner of Origin Title and Escrow, Inc.. Since 2003, Origin Title has handled real estate transactions – purchases, refinances, reverse mortgages – quickly and professionally. There will be no surprises, nothing misunderstood. Title searches are thorough and well-reasoned, to avoid unpleasant surprises later down the road. Calculate your closing costs in Georgia or Florida using our calculator or contact Origin Title using this form.

In Georgia, property owners can either own real estate with another person as tenants in common, or as joint tenants with survivorship. Georgia does not have Tenancy by the entirety, although other states do.

With Tenants in common, if an owner passes away, that person’s heirs inherit their portion of the property. 

If they owned the property as Joint Tenants with the right of survivorship, the property passes to the surviving owner. This is great for married couples who want to leave the property to their spouse without going through probate.  It is not always the best tenancy if a person is on their second or third marriage.  

There are several issues with adding someone to a title as a substitute for probating an estate, though.

a. Any liens or judgments against that person will attach to the property. This includes past and any liens filed in the future.

b. Inheriting property instead of being added to the title actually has some tax benefits. Being added to a title as a joint tenant eliminates the tax benefits of inheriting real estate, and gifts are often taxable. 

c. Adding a child to a title is not always a good idea. Conveying property to a child under the age of 18 years old creates a whole list of problems, such as the inability to sign for loans and sale of the property. 

So be careful who you add to the title, and why. It is not always the best way to avoid probate. Probating an estate can have tax advantages, and is much easier with a will.

John C. Bennett is a real estate closing attorney and owner of Origin Title and Escrow, Inc.. Since 2003, Origin Title has handled real estate transactions – purchases, refinances, reverse mortgages – quickly and professionally. There will be no surprises, nothing misunderstood. Title searches are thorough and well-reasoned, to avoid unpleasant surprises later down the road. Calculate your closing costs in Georgia or Florida using our calculator or contact Origin Title using this form.