DON’T CO-SIGN MORTGAGE FOR YOUR PARENTS
[The question to Bob Bruss above refers to Arizona as I’ll add a very important piece to the issue that applies to Arizona but not most other states.
As I’ve mentioned before, in Arizona it’s easy to prepare and record a “Beneficiary Deed” so that upon the owners death, ownership of the property immediately passes without probate to whoever is designated in the Beneficiary Deed. It’s a great way to go for many people.
Arizona real estate lawyer Richard Keyt has a fantastic web page that explains Arizona Beneficiary Deeds. John L. Wake]
WHY BOTH SPOUSES SHOULD HOLD TITLE TO THEIR HOME
No. If your dad’s name is not on the title to the house, presuming your mother survives him, she can’t inherit any interest in the house from him because he doesn’t own any portion of it. Therefore, she can’t receive a stepped-up basis after his death because she won’t inherit his interest in the house.
However, she can easily solve this problem with her quitclaim deed to him of a 50 percent interest before he passes on.