Liz Weston

Dear Liz: You recently cautioned a reader whose mother wanted to add her to a home deed to avoid probate. Please tell readers that they now may be able to avoid probate for a residence by using a transfer on death deed, similar to what’s available for bank accounts and cars. California recently enacted this option and at least 25 other states also offer this tool.

Answer: Thank you for pointing out the availability of this option, which can make it easier and less expensive to transfer a home to one’s heirs. It still would be smart to consult an estate-planning attorney, since probate isn’t the only end-of-life issue to address.

To recap, adding a child’s name to a home deed can avoid probate, the court process that otherwise follows death. But the addition is considered a gift for tax purposes and could cause the loss of a valuable tax break known as a step-up in basis.

In many states, probate is relatively quick and not that expensive, so trying to avoid it may be counterproductive. In other states, notably California, probate is expensive and protracted, which makes probate avoidance something to consider.