Should You Add Your Child to Your Deed in Florida? Risks, Taxes & Better Alternatives

Should I add my daughter or son to my deed in Florida?

It seems we get a question almost weekly about whether it is a good idea for a parent to add their daughter’s or son’s name to the deed to their home. Generally, the question is posed as an alternate to probate – clients wonder whether they should add their child’s name to the deed now, so that when they pass, the property automatically belongs to their child.

This is a bad idea for many reasons. First, when you add your child’s name to the deed or title to your home now, you give them what the law calls a “present interest” in the property. You won’t be able to change your mind later, or even sell or refinance the property, without your child’s permission.

Also, if your child is in an at-fault accident, gets a divorce, gets a judgment entered against them, owes the IRS any money, or anything similar, your property could be subject to being sold to satisfy these problems. Liens against your child for any of these reasons, and many others, will attach to your property and you will become responsible for paying for them, or selling your property so that those debts can be paid.

Third, when your children inherit your property after you die they get what is known as a “stepped up” basis, meaning that no capital gains taxes will be due on the increase in the value of the property from the time you purchased it until the time you died. When you give them a present interest while alive, you give up this important tax benefit, which could be tremendous depending on how long you have owned the property and how much it has increased in value.

Finally, adding their name to the property now could disrupt the value of the homestead and save-our-homes tax exemptions, for both you and your children.

These are just a few of the problems that can result from adding your children’s names to your deed. But, do not despair – we have a solution! Florida is one of the few states that recognize what is called a “Ladybird” or “Enhanced Life Estate Deed.” This is a unique deed that keeps you with full ownership of your property while you are alive, avoids all the problems listed above, but ensures that after you die the property automatically becomes your son’s or daughter’s, without the need for expensive and time-consuming probate.

If you have questions or would like to explore probate-avoidance strategies tailored to your situation, contact our offices in Clermont, Winter Garden, or Wildwood (serving The Villages) at 352-394-7408. Our team is here to help you protect your assets and plan with confidence.

‍