How do I add a name to a deed?

2 answers | Last updated: Jan 05, 2015
A fellow caregiver asked...

My father has a home in his name and my deceased mother. My father is dying. The will state the property would go to my brother and myself. Should we do a quick claim or warranty deed to put my brother and me on, along with my dad? I have power of attorney for him.

Expert Answers

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

Probably the last thing that you would want to do at this point would be to transfer title of the property to you and your brother.  The federal estate tax exemption is 3.5 million dollars so unless your father's estate is more than that, there is no estate tax advantage to taking the property out of his name.

Transferring the property to you and your brother at this point in time if you are specifically authorized to do so in the Durable Power of Attorney would remove the home from your father's probate estate so that the property would be subject to probate.  However, probate can be done quickly, economically and efficiently whereby the transfer of title through the Will will not present any major concerns.

Probably the biggest reason for not transferring the property to you and your brother while your father is alive is that you and he would receive the gift of the home at your father's tax basis.  So if he bought the home for $50,000 and it is now worth $200,000, you would have a capital gains tax if you later sold the home on all of the profit over the initial $50,000 purchase price with some minor adjustments.  However, if you inherit the home through your father's Will, you and your brother will receive what is referred to in the tax law as a "stepped up basis" which means that your tax basis becomes the value of the property at the time of your father's death.  So, for example if the home were bought by your father for $50,000 and was worth $200,000 at the time of his death, your tax basis would be the $200,000 value as of the time of his death.  So if you sold the home for $200,000, you would have absolutely no income tax liability on the sale.  It is for this reason that you are much better off inheriting the property through his estate.

Community Answers

Twin answered...

This is a question. What if this home is to stay in the family and to never be sold.  Does this make the tax situation a little easier on the person taking over the home of not having to pay higher taxes.