SR Client Question: Can adding my child to our Michigan home’s title prevent the property tax value from uncapping when I pass?
If you add your child as a co-owner of real property, he or she won’t get a full step up in basis when it is sold after your passing. Also, there is a risk of re-assessment for real estate taxes once you/your spouse, as original owners, are removed from the title after death.
In general, the better course of action is to allow your child to inherit the property through your trust, so he or she gets the step up in basis and won’t be re-assessed for real estate taxes, as there is a statute that keeps it from uncapping when inherited by a child from a trust.
For assistance in establishing a trust for real estate property and other estate planning purposes, contact a ShindelRock tax professional at www.calendly.com/shindelrock.