From Buyers To Renters
About Me
From Buyers To Renters

I am Burt MacDonald. We are slowly turning into a country of renters as more and more millennials feel that they prefer renting, which requires much less commitment than owning a home. I have completely embraced this lifestyle as well. I never feel like I can live in a city for very long. It doesn't take long to see most of the things you'd want to see in a given city. So I have decided to create a blog where I will cover various aspects of real estate, from both a owner's and renter's perspective, to help anyone I can.


From Buyers To Renters

Understanding The Benefits And Drawbacks Of Signing Over A Home To A Child

Alberto Russell

If your aging parent is currently living in their own home and wants to give the home to you after their death, then your mother or father may choose to sign the deed over to you before they pass away. This is a common thing and is often a tactic to avoid the entire probate process. While there are some benefits to this, there may be some drawbacks as well. Keep reading so you can help your parent understand whether the deed should be signed over or if the estate and home should go through probate after they have passed away.

Benefits Of Signing Over The House Deed

There are a wide range of benefits of signing over a house deed to a blood relative before dying. The most obvious is the avoidance of the entire probate process. Since the deed is already in your name, you can simply take possession of the property and make decisions as an owner. This means you can prepare the home for sale, live in it, or rent it out as you see fit. The home is legally yours.

Also, when a home is transferred to a blood relative, a new tax assessment can be avoided. While some states complete annual tax assessments or complete them once every three to five years, some states complete an assessment whenever a property changes ownership. This is called the uncapping of the tax assessment, and it occurs in states like California and Michigan. If you intend on living in your parent's home or if you use it as a rental property, then the new assessment can increase your property taxes a great deal. This is especially true if house prices have risen substantially in your area since the last assessment was completed.

Another benefit of signing over a home before death is the fact that the home will not be sold to fulfill unpaid estate bills. For example, if your parent passes with a great deal of credit card debt, then assets can be seized and sold off during the probate process. This includes the home, and you will be provided with the remaining assets after the debts have been paid. If the home legally belongs to you, then it cannot be identified as an asset or used to fulfill the obligations of the estate.

Drawbacks Of Signing Over The House Deed

There are some drawbacks to signing over a deed. One of the biggest drawbacks is the fact that your parent's home will become your asset once your name is placed on the deed. If you file for bankruptcy, are sued by an individual or business, or are delinquent when it comes to paying your debts, then your parents home can be used to settle your debts or pay out a lawsuit. Since the home is your asset, it can be used as one like it were your own home. 

Liens on the home are another consequence of holding your parent's house as your own asset. If this is a concern, then your parent can place the home in a revocable or living trust. This trust transfers the home to you after your parent's death. Unlike a will, trusts do not need to go through the probate process, so you can still skip the hassle of waiting for probate to conclude.

There are some other drawbacks that should be considered. If your parent needs to live in a nursing home at some point, then the transfer of the home will be considered by Medicaid. Specifically, if the home transfer occurred within 5 years, then Medicaid will deny payment for nursing home care coverage. In this case, the value of the home will be considered when determining eligibility even though your parent no longer owns the home. Unfortunately, deed transfers have been used in the past as a way to reduce an elderly individual's assets so they qualify for Medicaid paid nursing care. If you and your parent are faced with this sort of situation, then the home may need to be sold and the money will need to be used for nursing care.

Before you and your parent work out the details of a deed transfer or the signing over of a home, make sure to speak with a probate attorney so you understand both the advantages and drawbacks of doing this. For more information, contact a professional in your area or visit a website like