Considerations of transfers of property by deed

Sometimes clients inquire about adding their children’s names to the deeds on their homes – thinking this plan would avoid probate or perhaps in an effort to protect the home from claims, even if the home is protected homestead.  Generally speaking this may not be a good idea. 

One reason is that, upon death, your assets receive what is called a “step up” in basis – basis is a tax term which describes the amount of income received when an asset is sold, i.e., the original purchase price.  During your lifetime if you sell property, you pay taxes based on…