Include the 'Right Words' in the Deed to Your Home
Those words can either be Transfer on Death or Joint Tenant with Right of Survivorship. (Tenants by the Entireties is another option between spouses in some states). Either option lets you give your home to your loved one(s) at your death without the delays associated with probate or the cost of setting up a trust.
If you don’t have a spouse, it’s usually best to include the words Transfer on Death in the deed to your home, assuming a Transfer on Death (TOD) deed is legal in your state. (Currently, about half of the states plus the District of Columbia recognize this kind of deed, but other states are considering it.) With a TOD, you own your home 100 percent while you are alive, and you’re free to do whatever you want with it – borrow against it or get a reverse mortgage, for example. When you die, the home automatically and immediately transfers to the person(s) you named as beneficiary in the deed.
If you include the words Joint Tenant with Right of Survivorship in your deed, you and whoever else is on the deed are co-owners of your home. When you die, assuming you die first, the house automatically transfers to your co-owner(s).
One of the drawbacks to this form of ownership is that you won’t have full control over your home. For example, if you want to borrow against the house or refinance it, your co-owner might object and might even take you to court to stop you from doing what you want, including trying to prevent you from selling the house. Another drawback is that your home is subject to the debts of your co-owner. This means, for example, that if your co-owner is sued by a creditor for a past-due debt, the creditor might get the right to put a lien on the house.
Finally, Medicaid eligibility is something else you should take into account if you think you may need to apply for this federal government program at some point. If you do, including your home in your will rather than transferring it to a living trust is best due to how the asset is counted. Again, consult with an estate-planning attorney if Medicaid eligibility is a concern for you.
Making that decision yourself could be problematic, so it bears repeating: A qualified attorney can help you determine the best way to ensure that your home will go to your intended heir/s when you die.
Any opinions expressed in this column are solely those of the author.
Source : http://abcnews.go.com/Business/inheritance-101-leave-home-kids/story?id=32788920