A client came to me last week with a problem I’ve seen dozens of times. Years ago, he and his wife added their only son to the deed of their Brooklyn home. They thought it would be a simple way to pass the house on, avoiding probate. Now, that son is in the middle of a contentious divorce, and his spouse’s attorney is arguing that her client has a marital claim to a portion of my client’s home.
What started as a well-intentioned shortcut has become a potential threat to their most significant asset. Changing a property title is not an administrative update—it is a legal transfer of ownership with significant, and often unintended, consequences.
The Deed Is Not Just a Piece of Paper
In New York, a property deed is a formal legal instrument. The specific words used to describe ownership determine everything that comes after—how the property can be sold, how it’s treated in a bankruptcy or divorce, and where it goes upon an owner’s death. The most common forms of co-ownership are:
- Tenants in Common: Each owner holds a separate, divisible interest. If one owner dies, their share passes to their heirs through their estate, not automatically to the other owners.
- Joint Tenants with Rights of Survivorship (JTWROS): This is what most people think of when they add a child to a deed. When one owner dies, their interest automatically passes to the surviving joint tenants. It avoids probate for that asset.
- Tenancy by the Entirety: A special form of ownership available only to married couples, which provides automatic rights of survivorship and significant creditor protection.
Removing a name requires executing and recording a new deed. Most often, this is done with a quitclaim deed, where one person (the grantor) transfers whatever interest they have in the property to another (the grantee). This simple-sounding document can create complex problems. The transfer itself may trigger gift tax considerations if the equity transferred exceeds the annual federal gift tax exclusion—$18,000 per person as of 2024. It can also complicate the property’s cost basis, leading to a much larger capital gains tax bill when the property is eventually sold.
These documents must be precise. New York’s Real Property Law § 240-c even mandates that deeds be written in non-technical language. The purpose of this statute is to ensure clarity, but that clarity can be unforgiving if the wrong type of ownership was chosen years ago based on incomplete advice.
The Hidden Risks: Mortgages and Liabilities
The most immediate financial risk for many families is the mortgage. Nearly every residential mortgage contains a “due-on-sale” clause. This provision gives the lender the right to demand the entire loan balance be paid in full if an interest in the property is transferred without their consent. While federal law provides some exemptions for transfers to relatives, they are not universal and depend on the circumstances. Signing a quitclaim deed without consulting the lender is a gamble.
Furthermore, removing someone’s name from the deed does not automatically remove them from the mortgage. If your son, daughter, or ex-spouse is on the loan, they remain legally obligated to pay it, even if they no longer have any ownership rights. This creates a messy situation where someone is responsible for a debt on an asset they cannot control. To properly remove them from the loan, the remaining owner must typically refinance the mortgage in their name alone—something that may not be financially feasible.
This is before we even consider the liability issue from my client’s story. By placing his son on the deed, he exposed his home to his son’s future creditors, lawsuits, and marital disputes. Stewardship. That is our goal. We want to structure ownership in a way that protects the asset for the next generation, not expose it to their personal liabilities.
A More Prudent Approach: Using Trusts
More often than not, the reasons people add family members to a deed—primarily to avoid probate—are better served by other estate planning tools. A revocable living trust is an excellent instrument for this purpose.
Here’s how it works: You transfer the title of your home into the name of the trust. You remain the trustee and beneficiary during your lifetime, so you retain full control. You can sell it, mortgage it, or do whatever you wish with it. In the trust document, you name who should inherit the property upon your death. When that time comes, the successor trustee you named simply takes over and distributes the asset according to your instructions, completely outside the supervision of the Surrogate’s Court.
This achieves the goal of avoiding probate without the immediate risks of joint ownership. Your child’s divorce, a future bankruptcy, or a lawsuit would not put your home in jeopardy, because your trust—not you and your child jointly—owns it. This is the difference between a reactive legal filing and an intentional, protective plan.
Undoing a mistake on a deed is possible, but it requires careful work to avoid tax penalties and mortgage defaults. A deliberate plan is always the better course.
If you have added a family member to your deed or are considering it, the first step is a professional review of the document and your circumstances. We can schedule a deed and title review to analyze your current ownership structure and outline the specific implications of making a change before you act.
