Adding Someone to Your House Title in California? Understand the Risks First

Adding a child, spouse, relative, or another person to the title of your home might sound simple.

Sign a deed. Record it. Done.

But changing ownership of real estate can have consequences that property owners don't anticipate.

One of the biggest things to understand is this:

When you add another person to the title of your property, you're not simply adding a name to a piece of paper. You're potentially giving that person an ownership interest—and issues associated with that person may affect the property or a future transaction.

That's why we like to say:

Make sure you're doing good deeds.”

Before changing title to California real estate, understand what you're doing and get appropriate professional advice.

Why Do People Add Family Members to Their House Title?

There are many reasons.

A parent may want a child to receive the home after the parent's death.

A homeowner may get married and want to add a spouse.

Someone may believe adding their children as joint tenants is an easy way to avoid probate.

Others may be trying to simplify estate planning.

The intention can be perfectly reasonable.

The problem is that changing title today can create consequences today.

There may be better ways to accomplish the owner's ultimate goal.

What Can Happen When You Add a Child to Your Deed?

Consider a simplified example.

Mom owns her home.

As part of her estate planning, she decides to add her five adult children to title with her.

Her thinking is straightforward:

When she dies, she wants the property to pass to the children without a complicated probate process.

Everything seems fine.

Then, a year later, Mom decides to sell the house.

That's when the title search discovers something she didn't expect.

One of the children has a substantial tax lien or judgment associated with them.

Now the family has a problem that didn't exist when Mom owned the property by herself.

Why Are Liens and Judgments Important?

Before a real estate transaction closes, the title company examines matters affecting title to the property.

When multiple people hold title, issues associated with those owners can potentially become relevant to the transaction.

Depending on the circumstances and applicable law, those issues can include things such as:

• Tax liens
• Judgments
• Bankruptcy matters
• Child-support liens
• Court actions
• Creditor claims
• Other recorded liens or encumbrances

Exactly whether and how a particular lien or judgment affects a property depends on the facts and applicable law.

But the larger lesson is simple:

Adding another owner can introduce that person's legal and financial circumstances into your property's title picture.

Adding Someone to Title Gives Them Ownership

This is another point people sometimes overlook.

Adding an adult child to your deed isn't the same thing as putting their name down as an emergency contact.

You're changing ownership of real estate.

Depending on how title is held, that person may acquire a legal ownership interest in the property.

That can become particularly important if you later decide to:

Sell the property.

Refinance it.

Change how title is held.

Remove that person from title.

Transfer the property to someone else.

Your future plans may now involve another owner.

That's a much bigger decision than simply putting the kids on the house.”

Can Adding a Child to Title Help Avoid Probate?

People frequently consider adding children to title because they're trying to avoid probate.

Depending on how title is held, rights of survivorship may allow an ownership interest to pass to a surviving owner after another owner dies.

But that doesn't mean adding children to title during your lifetime is automatically the best estate-planning strategy.

There may be alternatives, including certain forms of joint ownership, a living trust, or, for qualifying California property, a Transfer on Death Deed.

Each option can have different legal and tax consequences.

That's why the better question isn't:

How do I put my kids on my deed?”

It's:

What am I trying to accomplish, and what's the best way to accomplish it?”

What Is Joint Tenancy?

Joint tenancy is one way multiple people may hold title to California real estate.

One important characteristic is the right of survivorship.

Generally, when one joint tenant dies, that person's interest can pass to the surviving joint tenant or tenants, subject to applicable requirements and procedures.

That can make joint tenancy useful in certain situations.

But remember: the other joint tenants are owners now, not simply future beneficiaries.

That distinction matters.

What About a Living Trust?

A living trust can be another estate-planning option.

A properly created and funded trust can establish instructions for how assets are handled during the owner's lifetime, in the event of incapacity, and after death.

A trust can also address more than one piece of real estate.

For many families, that broader planning ability can be important.

But creating a trust is a legal decision.

A title or escrow professional can explain title and transaction requirements, but an estate-planning attorney should advise you about whether a trust is appropriate for your circumstances.

What About a Transfer on Death Deed?

California also allows certain property owners to use a Transfer on Death Deed, commonly called a TOD deed or TODD.

This can potentially allow an eligible owner to identify a beneficiary to receive qualifying real property after the owner's death without making that beneficiary a current co-owner during the owner's lifetime.

We've written separately about California Transfer on Death Deeds, because there are specific legal requirements that need to be followed.

That's another example of why it's worth investigating your options before simply adding someone to title.

There Can Be Tax Consequences Too

Changing ownership of real estate can potentially raise tax questions.

Depending on the transaction and circumstances, issues involving property-tax reassessment, capital gains, gift taxes, or the recipient's tax basis may need to be considered.

California's property-tax rules have also changed over time.

This is not an area where you want to rely on something a friend did 15 years ago.

Before transferring an interest in valuable real estate, consider talking with a qualified attorney and tax professional.

Taking Someone Off Title Can Be Complicated Too

The same caution applies in reverse.

Suppose you added someone to title several years ago and now want them removed.

That person may need to cooperate with the transfer.

There may also be liens, loans, court orders, divorce issues, tax consequences, or other circumstances affecting what can be done.

You can't always undo a title decision as easily as you made it.

That's why it's worth getting the decision right at the beginning.

Be Careful With Do-It-Yourself Deeds

It's easy to find deed forms online.

That doesn't mean completing one without professional guidance is a good idea.

The document itself may look simple.

The consequences of the document may not be.

A deed can affect:

• Ownership
• Survivorship rights
• Estate planning
• Creditor exposure
• Property taxes
• Future sales
• Refinancing
• Title insurance
• Family rights and disputes

The question isn't simply whether you can fill out a deed.

The question is whether the deed you're recording actually accomplishes what you intend without creating a problem you didn't anticipate.

Title Problems Often Appear When You’re Trying to Sell

This is one reason we talk about these issues so much.

People can live for years without realizing there's a title problem.

Then they decide to sell or refinance.

A title search is completed.

And suddenly an old deed, lien, judgment, deceased owner, trust issue, or other matter needs to be addressed before the transaction can close.

That's not when you want to discover that a seemingly simple decision from years ago created a complicated problem.

Good planning today can prevent a frantic title problem tomorrow.

Before Adding Someone to Your California Property Title, Ask These Questions

Before recording a deed, consider asking:

Why am I changing title?

Am I trying to avoid probate?

Am I trying to provide for my children?

Am I adding a spouse?

Do I understand the ownership interest I'm giving this person?

Could that person's liens or judgments affect the property?

What happens if that person gets divorced, has creditor problems, or dies before I do?

What happens if I want to sell or refinance later?

Are there tax consequences?

Would a trust, Transfer on Death Deed, or another estate-planning strategy accomplish my goal more appropriately?

Those questions can prevent a lot of trouble.

The Bottom Line: Do Good Deeds

Adding someone to the title of your house may be easy mechanically.

That doesn't make it a simple decision.

Real estate is often one of the largest assets a person owns. Before changing ownership, understand the legal, title, estate-planning, and potential tax consequences.

Don't record a deed simply because somebody told you, This is what we did with Mom's house.”

Your family, property, finances, and goals may be completely different.

Make sure you're doing good deeds—and getting good advice.

Have a Title or Escrow Question?

We're Bobby Tarango and Mike Arias, sales representatives with Chicago Title, and we work with real estate professionals throughout the High Desert to support their title and escrow needs.

Through ChicagoTitlePro.com and TitlesEverything.com, we share real estate information and resources designed to help real estate professionals, buyers, sellers, and property owners better understand title, escrow, ownership, and the many moving parts of a real estate transaction.

If you're dealing with a title issue or preparing for a real estate transaction, reach out to Bobby or Mike about the title and escrow side of the transaction.

For legal, estate-planning, or tax advice about adding or removing someone from title, consult the appropriate qualified professional.

Bobby Tarango & Mike Arias
Chicago Title
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