Should you add your child's name to the deed to your home?

Sue: Yes, I was just wondering, do I still need a living will if my kids are put on my like say my bank account or added to like the real estate, things like that?

Attorney Tom Olsen: Okay, so a living will is a pull-the-plug, don't-keep-you-alive-by-machines. You're probably referencing a living trust. A living trust is a tool to avoid probate. Sue, as a general rule, we do not recommend that you add your children's names to your bank accounts because if they get sued, work up a million dollars of medical bills, have a terrible automobile accident, get divorced, file bankruptcy, don't pay their income taxes, their creditors are coming after your money because their name is on your bank accounts.

Same thing would be applied to the real estate, Sue, their creditors come after your home because their name is on your deed. Plus, once you do that, it's written in stone, you cannot undo it. Sue, I'm in agreement. You want to try to avoid probate, but adding their names to your bank accounts and the deeds to your property is not the way to go.

Sue: Okay. All right, so it's better to do, you were saying earlier something about like putting them on like as a death benefit then?

Tom: Yes, for bank accounts, it's easy to avoid probate on bank accounts by making those accounts POD, payable on death to your children. That means that as long as you're alive, that bank account is in your name only. Your kids’ creditors can't touch it. It means that when you pass away, it will automatically go to your children, and making your bank accounts POD, payable on death to your kids is a great tool to avoid probate on your bank accounts.

Sue: Thank you so much for the information.

Tom: Okay, you're welcome, Sue. The other tool, Sue, that we're using to avoid probate on real estate is what we call a ladybird deed. A ladybird deed is a tool to avoid probate on real estate. It's a deed that we prepare here at the Olsen Law Group. It states that as long as you're alive, it is your home to do with as you please. No restrictions whatsoever, but when you pass away, your home will automatically go to your children, no headaches, no hassles, no probate. We can use this ladybird deed for your home, your rental property, your beach condo, your vacant lot, your commercial property, and we can use it even if there's a mortgage on your property, Sue.

Sue, again, we're all about helping people to avoid probate. We have free booklets on that, Sue. If you want to call our office, we'll mail you that, Easy Ways to Avoid Probate, and as well, I'm doing a workshop on that very topic this Wednesday, February 21st, if you want to come to that. Sue, you're on the right track. Glad you're thinking about this. We just don't want you to make a mistake. Here at Olsen Law Group, we’ll help you out with that.

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