Own real estate? Whose name is on the deed?

When a couple buys a home, they often simply put both names on the deed. When a homeowner gets married, he or she often adds the spouse’s name to the deed. And when a single person shares a home with an elderly relative, they often put both names on the deed.

This may be common, but it’s not necessarily the best idea. Here are some things to consider:

Capital gains. Under certain circumstances, if you add a new spouse’s name to the deed and sell the house shortly afterward, you can end up owing more capital gains tax on the sale than if you had left the house in one spouse’s name.

Estate planning. You might want to adjust ownership of the house based on the objectives in your estate plan. Re-titling the house could save estate taxes and have other benefits.

Asset protection. If one member of a couple is more likely to face lawsuits or actions by creditors, it might be best to keep the house in the other person’s name.

Medicaid. If two people’s names are on the deed and one owner is going into a nursing home, the house might have to be sold and the proceeds given to the nursing home before Medicaid will begin picking up the cost.

The bottom line: Whose name is on the deed can make a big difference in terms of your legal rights. Make sure you think carefully about this…and consider changing it if your circumstances change.