putting children's names on aging parents accounts

[Rick_Head]

I think it's an incredibly dumb idea for many reasons. BUT, I'm Canadian and here it only avoids a small probate fee (which may or may not be required depending on the estate). It also opens up Pandora's box if there is more than one kid. YMMV.

 

[pb4uski]

In my Mom's case, sis and I are co-owner's of some bank accounts only so we can help her with bill paying and have ready access to her funds if she becomes incapacitated. No step up issues there and the amounts are modest. Her other financial accounts have beneficiary designations. Real estate is owned by a living trust (not sure we need this any longer) and autos, boats, etc have TOD designations. Total estate is well under estate tax exemption amount.

 

[jerome len]

All of you make great points and I appreciate reading everyone's comments. I've learned that families have to develop a great sense of trust......between parent and child and also between all the siblings. And, every family with some degree of wealth needs a good tax attorney or CPA to determine joint ownership, lrevocable trusts, etc. Most of my assets have been placed in a trust to avoid probate, both the cost and the time delay, which can vary be State. My DW and kids will all share in my assets, I may have to pay the tax man some as well.......but, planning will keep it to a minimum.

 

[misanman]

We ran into a bit of an issue when my MIL passed away. Twenty years ago, my youngest brother-in-law was added to the deed on MIL/FIL's Florida place. We're not sure of all the motivations were but the problem was they didn't tell anyone and I think my MIL actually forgot about it. The BIL didn't seem to know either, but he would have been early 20s when they made the change.

Her will designated equal shares for her three children and the BIL was cooperative so we were able to work it out. We did not claim the stepped up basis on his half of the property so there was some pain when after we sold the property and did the taxes.

I'm not sure what would have happened if BIL had gone through a divorce or died. I suppose his wife could have ended up sharing the place with her in-laws or otherwise causing a stink.

Seems like adding children to titles can be a risky proposition. I also wondered if it constitutes a "gift" for tax purposes at the time the change is made. And how do you back out of it if situations change.