What it really means when you add someone to the title of your property

Anyone who reads this blog regularly will have noticed, as I have, how often people talk about "adding a name" to the title to real estate. I hear the same phrase in my practice and in my seminars. It concerns me that so many people speak as casually about adding names as they do about adding items to a grocery list. People just don't realize the seriousness of "adding a name"; they end up in every kind of legal tangle both before and after death. So I thought I'd take a few minutes to point out what it really means when you add someone to the title of your property.

1. The words "I'm adding you to the title of my house" should be replaced with "I'm giving you my house". No, I'm not exaggerating. Adding a name creates legal rights. You are actually giving away some or all of the ownership of the property. It's not a placeholder. The law doesn't care that it's "really" your house if the other owner doesn't want to sell or mortgage the house even though you do.

2. You can't take it back unless the person you added agrees. You've created the right of ownership for that person. Nobody can just toss you off the title to your own house, so why should you be able to do that to someone else?

3. Don't count on the person agreeing. People are human. They get greedy. They get manipulative (or their spouses do). In other cases, they do things they think are for your own good even if you don't want them to. In other words, you simply cannot control whether someone is going to co-operate with your plans for the property. You've given away legal control.

4. You could be creating a tax problem. Have you asked a lawyer or accountant about tax implications at the time you add someone, or in the future when the property is sold/distributed in the future? If not, why not? Is it because you're okay with you or your kids paying tax that wouldn't exist if you just left the title in your name?

5. You can't stop the other person from dealing with their part of the property. If you add someone as a tenant-in-common, that person can add other people to the title without your consent or even your knowledge. Now there's a surprise you could live without.

6. You can't use your will to untangle these arrangements.

7. The fact that it worked for your cousin's hairdresser's best friend does not mean it will work for you.

I'm not even going to go into the problems that arise in estates when a parent adds one or more of the kids to the title and doesn't clarify in writing what is supposed to happen with the ownership. That's something I've blogged about many times already. It 's an issue of its own.

Please get legal advice before "adding a name" to your title. There may be other ways to achieve what you're trying to do without all of the hassles and complications.