We are often asked to add a minor child’s name to the title. The reasons vary from not wanting to prepare a Will to trying to get the lower tax rate for primary residence. The disadvantages of putting your minor child’s on the deed far outweigh the reasons for doing so. Therefore, we strongly advise against adding a minor child to the title to real estate.
In South Carolina, a person under the age of eighteen, unless emancipated by the court, is not legally competent to sign legal documents nor are they considered to have the legal capacity to enter into a legally binding contract. If your minor child is on the title to real estate and you decide to sale the property prior to the child attaining the age of eighteen, a probate court will require a guardian ad litem and conservator appointed to protect your child’s interest. This process can be timely and expensive. Additionally, the court often will require the child’s proceeds to be set aside and managed in a separate trust until the child is eighteen. You also would not be able to refinance your house if your minor child is on title since the child cannot sign legal documents such as a mortgage.
Secondly, children don’t always make the best decisions. Once your child’s name is on the deed, they become a legal co-owner. Should your child and you have a falling-out and you decide to sell the property, the child could refuse and make selling the property very difficult. Without a court order you may be prevented from selling the property.
Your property also would become exposed to any of your child’s creditors. If your child makes a bad financial decision or is sued, any resulting judgment would attach to the property and you would have to satisfy the judgment prior to selling.
Lastly, there could be gift tax issues in giving your child an interest in the house as well as it could affect your Medicaid benefits as it could trigger a period of ineligibility.
Therefore, it is best to wait until the child is legally emancipated or perhaps even older before placing your child on the title. It is strongly advised that you consult a real estate attorney and tax attorney prior to doing so.
Historical Fact- Marion Street is named for General Francis “Swamp Fox” Marion. Marion was born on his family’s plantation in Berkeley County in 1732. He was a military officer who served in the American Revolutionary War. Many consider him the father of modern guerrilla warfare. He is credited in the lineage of the US Army Rangers. He was a persistent adversary of the British during their occupation of South Carolina in 1780-81. Colonel Banaste Tarleton was sent to capture or Kill Marion but gave up after pursuing him for 26 miles through a swamp, earning him the nickname “The Swamp Fox.” After the war Marion served in the state senate before dying on his plantation at the age of 63. The Mel Gibson movie The Patriot is loosely based on Marion. Francis Marion University and Marion County are named for him.