Can I Just Add My Child to the Ownership of My Asset?

It’s a common question: “Why don’t I just add my child’s name to the deed for my house or to my bank account? That way, when I pass away, it will automatically go to them and avoid probate.”

On the surface, this idea might sound simple and cost-effective. But in reality, adding your child as a co-owner of your assets can create serious legal and financial problems—for both you and your child.

Why People Consider Adding a Child to Ownership

The main reason parents do this is to make things “easier” after they’re gone. Joint ownership means the child automatically inherits the asset without going through probate. While that seems like a shortcut, it often comes with hidden dangers.

The Dangers of Adding Your Child as a Co-Owner

#1-Loss of Control

The moment you add your child to the title, they become a legal co-owner. This means:

You cannot sell, refinance, or transfer the property without their consent.
If you change your mind later, removing them from the title requires their cooperation.

#2-Exposure to Your Child’s Creditors

Your child’s financial problems can suddenly become your problem. If your child is sued, goes through a divorce, or files bankruptcy, the asset you added them to could be targeted by their creditors—even if you paid for it and live there.

#3-Tax Consequences

Adding a child as co-owner is legally considered a gift, which may trigger gift tax reporting obligations. It can also create significant capital gains tax issues down the road if your child sells the asset, because they may not benefit from the “step-up in basis” that normally applies when assets are inherited.

#4-Unintended Disinheritance

If you have more than one child but only add one to an account or deed, that child legally owns the asset when you pass away. They are not legally obligated to share with their siblings, no matter what your intentions were.

#5-Complicated Estate Administration

What seems like a shortcut often creates the opposite effect. Instead of saving time and money, your loved ones may face disputes, tax problems, and even lawsuits.

A Better Alternative: Estate Planning

Instead of adding your child as a co-owner, consider estate planning tools such as:

A revocable living trust to pass assets outside of probate while keeping control during your lifetime.
Beneficiary deeds or payable-on-death (POD) designations for certain accounts.
A comprehensive estate plan that addresses your unique family dynamics and protects against unintended consequences.

The Bottom Line

While adding a child to ownership may sound like a quick fix, it often creates bigger problems than it solves. With thoughtful estate planning, you can achieve your goals—avoiding probate, protecting your children, and minimizing taxes—without putting your assets or relationships at risk.

Protect What Matters Most

At the Law Offices of Glenn Bishop, PLLC, we help Arizona families create estate plans that keep control in their hands while ensuring a smooth transfer of assets to the next generation.

Contact us today to schedule a consultation and learn the best way to pass on your legacy—without unnecessary risks.

Disclaimer:

Information contained within this article and blog is not legal advice, nor does it create an attorney-client relationship between the author, Glenn Bishop, nor the Law Offices of Glenn Bishop, PLLC, and the reader of this article. Do not act or fail to act based on the information contained herein without seeking the advice of a competent and licensed attorney in your jurisdiction. The Law Offices of Glenn Bishop, PLLC, expressly disclaims any and all liability with respect to actions taken or not taken based on the information contained herein.

About The Author

Glenn Bishop is the founder of the Law Offices of Glenn Bishop, PLLC. Glenn helps individuals and businesses resolve legal challenges and plan for the future, so they can get back to living their lives.

Questions? Ask Glenn!

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