Trending
Dear Mr. Feichthaler:
I have heard horror stories about probate fees when no estate planning is done for a home. I want my two children to own the property equally if I were to die. Should I add them to my title as owners?
-- Jada M.
Dear Jada:
First, you should be commended for asking this question. Estate planning provides peace of mind, while making things a bit easier for your kids if they lost you. Probate is a legal procedure where assets of a person who has died, or "decedent," is transferred to new owners. Probate can be expensive and time consuming. Probate costs often exceed $20,000, and are based on the asset values of an estate. A home is always a major portion of that asset base. Avoiding probate on all assets is ideal, but having a home transfer without probate will result in a large expenditure and stress avoided.
I always caution my clients to avoid adding children to ownership of their property for several reasons. First, if you decided to later sell or mortgage your home, they would have to agree to the sale or mortgage. Also, their portion may not be protected by Florida Homestead laws, which could result in liens attaching to your home later.
If your goal is for your kids to immediately receive ownership of your home, but only after your passing, the Enhanced Life Estate Deed is an ideal choice. You retain all rights and privileges of ownership, including the right to sell or mortgage without permission of your kids. You also retain full homestead protections and benefits. By naming your two children as beneficiaries on this deed, they will assume ownership upon the recording of a death certificate in the public records. If you currently have a mortgage, they would need to arrange for refinancing it, or selling the property to pay for it.
Anyone seeking to make a change in ownership of property should consult with an attorney before attempting to do so. There can be pitfalls relating to title, documentary stamp tax, gift tax and loss of homestead that may not have been considered when transferring property to family members.
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.