Why Adding a Child to Your Illinois House Title Can Backfire

 Posted on December 04, 2025 in Estate Planning

Elderly homeowners often search for ways to make their estate planning tasks less burdensome. At the same time, keeping a home in the family is also important for homeowners who may have lived in the same home for decades. To these ends, many elderly parents believe that simply adding an adult child to their deed is the simplest way to protect the home.     

Unfortunately, this simple act can unwittingly trigger gift taxes, Medicaid penalties, creditor claims, and expensive family disputes. Perhaps just as serious, once an adult child’s name is on the house deed, parents could lose control over their own home. Well-intentioned as it may be, this is a shortcut that can turn into a long-term legal headache – both for the parents and the adult child.

Before you make such a serious move, it is essential that you fully understand all the legal consequences of adding your adult child to your home title. It is extremely beneficial to speak to a knowledgeable Kendall County, IL estate planning attorney before you make such an important decision.

Why Do Parents Add Adult Children to Their Home Deed?

The general assumption when placing one or more adult children on a home deed is that it will protect the home for children and grandchildren. Rather than discussing the issue with an estate planning attorney, parents may take advice from friends, family members, or social media posts. Others may add children to their home deed due to misinformation regarding Medicaid eligibility or asset protection. Still others may be pressured by an adult child to add them to the deed to avoid probate.

What Can Go Wrong When an Adult Child is Added to the Parents’ Home Deed?

There are many different things that can go wrong once a child is added to the home deed, including:

Loss of Full Control Over the House

Parents who add a child to their deed rarely realize they are giving up partial control of their own home. From refinancing to selling the property, or even taking out a home equity loan, nothing can happen without the child’s agreement and signature. Disputes can quickly arise when a child disagrees or refuses to sign.

Exposure to the Child’s Creditors or Divorce

Once a child is added to the parent’s home deed, his or her financial problems become the parent’s problems. If the child has a lawsuit against him or her, a liability judgment, a claim in divorce, or is going through bankruptcy, a lien can be placed on the home, or the home may be forced to be sold.

Gift Tax Consequences

Adding a child to a house deed is legally considered a gift, which reduces the lifetime federal estate exclusion and may require filing a federal gift tax return. For larger estates in particular, such a move can trigger Illinois estate tax planning complications.

Medicaid Five-Year Lookback Penalties

Parents who may one day need Medicaid for long-term care can find themselves facing months or even years of ineligibility after adding a child to the house deed. Adding a child counts as an uncompensated transfer – something that is often only discovered after a medical crisis.

Loss of Step-Up in Basis

If the child receives the home as a lifetime gift rather than an inheritance, he or she loses valuable tax benefits. Selling later can create significant capital gains taxes for the child.

Family Conflict

Adding one child but not others can result in accusations of favoritism, claims of undue influence, or siblings demanding equal compensation after the parent’s death. Co-owners can block the sale, and siblings or estranged children may file partition actions.

Are There Better Alternatives to Adding an Adult Child to a Home Deed?

There are alternatives to adding a child to a home deed, including:

• An Illinois Transfer-on-Death Instrument (TODI)
• A well-drafted Revocable Living Trust
• Enhanced Life Estate Deeds
• A Power of Attorney, along with a clear estate plan

Contact an Oswego, IL Estate Planning Lawyer

Before adding a child to your home’s title, speak with a knowledgeable Kendall County, IL probate attorney who can explain the risks and the alternatives. A short consultation with Attorney Krajniak can help prevent tax penalties, Medicaid problems, family conflicts, and loss of control over your home. Call 630-448-2406 to schedule your free consultation.