Thinking About Adding Someone to the Deed? Read This First

Dec 22, 2023 By Triston Martin

Are you thinking about adding someone to the deed of your property? Whether it's a family member, a partner, or a friend, this can be a significant step in your real estate journey. While it may seem straightforward, there are several crucial things you should know before making this decision. In this article, we'll walk you through 5 essential factors to consider before adding someone to the deed.

Understanding Property Ownership

Before diving into the specifics, let's start with the basics of property ownership. When you own a property, you have certain rights and responsibilities related to that piece of real estate. These rights include the ability to live in the property, make decisions about its use, and sell it when you choose. They also come with financial obligations like property taxes and maintenance costs.

Now, let's explore the five critical aspects to consider when adding someone to the deed:

1. Joint Tenancy vs. Tenancy in Common

Ownership Structure Matters: One of the first decisions you need to make when adding someone to the deed is how you want to structure the ownership. There are two common options: joint tenancy and tenancy in common.

Joint Tenancy: In joint tenancy, every owner has an equal property share. If one owner dies, their share automatically transfers to the surviving owners via the right of survivorship. However, a unanimous agreement from all owners is necessary for any property sale or transfer.

Tenancy in Common: With tenancy in common, ownership percentages can vary, and there's no right of survivorship. This means that if one owner dies, their share typically goes to their estate and heirs. Additionally, one owner can sell or transfer their share without the consent of the others.

Consideration: Selecting between joint tenancy and tenancy in common is vital as it dictates ownership structure and the outcome upon an owner's passing. Have a conversation with the individual you're including on the deed, and contemplate seeking legal counsel to ensure you make the best choice for your circumstances.

2. Financial and Legal Implications

Know the Financial and Legal Ramifications: Adding someone to the deed has financial and legal implications that can impact both parties involved. Here are some key points to consider:

Mortgage Responsibility: If there's an existing mortgage on the property, adding someone to the deed does not necessarily mean they are responsible for the mortgage payments. The lender may require the original owner to remain liable for the loan.

Tax Implications: Adding someone to the deed may have tax consequences, especially if you plan to sell the property in the future. It's essential to understand the potential tax implications, such as capital gains taxes.

Ownership Percentage: Consider how ownership percentages will be allocated. Will it be equal, or will it reflect each party's financial contribution to the property?

Consideration: It's crucial to consult with a real estate attorney or financial advisor before proceeding with adding someone to the deed. They can help you navigate the complex financial and legal aspects to protect both parties' interests.

3. Relationship Dynamics

Nurture Healthy Relationship Dynamics: Adding someone to the deed is not just a financial and legal decision; it also has significant implications for your relationship with that person. Here are some considerations:

Communication: Open and honest communication is key. Discuss your expectations, financial responsibilities, and long-term plans for the property.

Life Changes: Consider potential life changes, such as marriage, divorce, or the death of one of the owners. These events can impact property ownership and require legal adjustments.

Dispute Resolution: It's wise to outline a dispute resolution process in case disagreements arise regarding the property. This can help avoid costly legal battles.

Consideration: Adding someone to the deed can strain even the strongest relationships if not approached with care. Make sure you're on the same page and have a plan for addressing potential challenges that may arise in the future.

4. Estate Planning and Inheritance

Plan for the Future: When you add someone to the deed, you are essentially altering the ownership structure of the property. This change can have significant implications for estate planning and inheritance. Here are some key points to consider:

Estate Taxes: In some regions, adding someone to the deed can trigger potential estate taxes upon the original owner's death. Understanding how this might affect your estate and the inheritor is crucial.

Inheritance Rights: Depending on the ownership structure you choose (joint tenancy or tenancy in common), the co-owner may have different rights regarding the property after your passing. For example, in joint tenancy, the property automatically passes to the surviving owner, while in common tenancy, it may go through probate.

Legal Documentation: It's essential to update your estate planning documents, such as your will or living trust, to reflect the changes in property ownership. Clearly specify property handling upon your passing to prevent conflicts and ensure your wishes are executed.

Consideration: Consult with an estate planning attorney to ensure your estate plan aligns with your new property ownership structure. They can guide you in minimizing tax liabilities and ensuring a smooth transition of the property to your chosen inheritors.

5. Potential Impact on Financing and Credit

Guard Your Financial Health: Adding someone to the deed can have an impact on your financial and credit situation. Here's what you need to know:

Mortgage Approval: If there's an existing mortgage on the property, adding a co-owner may require lender approval. Some lenders may be hesitant to approve changes in ownership, so it's essential to check with your lender beforehand.

Credit History: Your co-owner's credit history and financial situation can affect your credit profile. If they have a poor credit history or financial issues, it might impact their ability to secure loans or lines of credit in the future.

Liability for Debts: Depending on the ownership structure and local laws, adding someone to the deed could potentially expose your property to their debts or financial obligations. This is especially important to consider if your co-owner has a history of financial instability.

Consideration: Before proceeding, discuss the financial implications with your co-owner and consult with your lender to understand any potential hurdles in the financing process.


By considering these five crucial aspects, you can make a well-informed decision about adding someone to the deed of your property. Each of these considerations plays a vital role in ensuring a smooth and successful transition in property ownership while safeguarding your financial interests, estate planning goals, and relationships.

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