Adding Person to Grant Deed

**Mylissa** · 10-09-2010, 01:50 PM

My question involves real estate located in the State of: California.
Hello, this is a question i'm asking for someone else. I gave her my answer but just want to make sure. My sister is dying. She has willed everything to her roommate. The roommate would like to be added on her grant deed now - before my sister dies. But my sister has a $40K mortgage outstanding. Can the roommate be added on to a deed now - before my sister dies? I told her that the bank owns the deed, and that the property would have to be paid off before my sister could add her to the deed. Is this correct? Thank you very much, Mel.

**flyingron** · 10-10-2010, 06:03 AM

You have a lot of misinformation in your post. The bank does not own the deed, and you don't get "added" to a deed like it was some sort of club membership. Deeding property means you're actually giving it to someone. If your sister is still alive it's generally ill-advised to be giving away assets especially if there is any medicaid involved. While it is legal for her to deed away the property while the mortgage is still in affect, it is quite possible that an enforceable due-on-sale clause will be invoked by the bank in this case. Further, there are tax issues on both sister and roommate with doing this now.

You have tons of misconceptions here. The bank does not own the deed. The deed is not a single entity. You do not have to pay off the mortgage to deed something.

The deed is not membership in a club, or even a statement of intent as to who will own the property at some time in the future. Each deed immediately delivers ownership from the grantor to the grantee. To "add" her to the deed now means giving her half or all of the property. This is EXTREMELY ILL ADVISED.

While the bank can't stop you from deeding the property, they most likely have a due-on-sale clause that can be enforced on such a transfer. If sister is somehow reliant on medicaid for her medical treatment, this sort of transfer can invalidate her eligibility. Finally, there are serious tax implications both for sister and for the roommate to do the transfer while she is still living.