A Step-by-Step Guide on How to Add a Name to a Deed in Maryland and the Associated Risks

Whether you've recently married, entered a business partnership, or want to pass your property onto your heirs, you may find yourself needing to add a name to your property deed. Here, we'll guide you through the process of how to add a name to a deed in Maryland, along with potential risks that you may encounter.

Step 1: Understand the Types of Deeds

In Maryland, there are several types of property deeds, each with its own implications. These include tenancy in common, joint tenancy, tenancy by the entirety and deeds in trust. Understanding the differences between these can help you make an informed decision when adding a name to a deed.

Step 2: Prepare a New Deed

To add a name to a deed in Maryland, you must prepare a new deed that includes both the current owner's name and the new owner's name. The current owner is the grantor, and the new owner is the grantee.

Step 3: Legal Description of the Property

The new deed should include a legal description of the property. This includes the property's address and the detailed description used in the original deed. The deed should indicate whether the property is subject to the payment of a semi-annual ground rent or if the property is held in “fee simple” – with no ground rent obligation.

Step 4: Sign the Deed

Once you've filled out the new deed correctly, the grantor must sign it in the presence of a notary public.

Step 5: Record the Deed

After notarization, the deed should be recorded at the local county clerk or recorder's office where the property is located. There may be a small fee associated with this process. If the person whose name is being added to the deed is not closely related to the original owner or owners, there may be a state and county transfer and recordation tax, typically equal to 2% of the value of the property interest being transferred.

Risks to Consider When Adding a Name to a Deed

While the process of how to add a name to a deed in Maryland might seem straightforward, it's important to understand the potential risks:

1. Loss of Control: Adding a name to your deed means that you're sharing ownership of your property. You may lose some control, as any future decisions about the property will require the agreement of all listed owners.
2. Debt Liability: If the new owner has debts or liabilities, the property could become a target for their creditors. A creditor could obtain a judgment against an owner and levy on the property, forcing it to be sold at a public auction to extract that owner’s share of the property value.
3. Tax Implications: Adding a name to your deed could have tax implications. For instance, the IRS could consider it a gift and it may be subject to gift tax if it exceeds the annual gift tax exclusion. In addition, adding a co-owner to the deed could increase the amount of capital gains taxes that would have to be paid by the surviving co-owner.
4. Difficulty in Reversal: It's generally easier to add a name to a deed than to remove it. If relationships sour, the co-owner may not agree to the removal of their name. Generally, we don’t recommend having anyone else’s name on your property except yours.
5. Impact on Estate Planning: Adding a name can disrupt your estate plan. If you have a will or trust in place, adding a new owner to your deed could complicate or defeat the distribution scheme of your estate upon your death.

Adding a name to a deed in Maryland involves careful consideration and planning. While the process can seem simple, there are potential risks and implications to consider. It's always wise to consult with a real estate or estate planning attorney before making these significant decisions to ensure your interests are fully protected. This article is for educational purposes only and is not to be considered legal advice.