The Hidden Dangers of DIY Planning in North Carolina
Why “Just Putting Mom on the Deed” Can Backfire
Think Adding Someone to the Deed Is a Simple Fix? Think Again.
If you’ve ever thought, “I’ll just add Mom to the deed,” or “Let’s put my daughter on the house so we can avoid probate,” you’re not alone. These quick-fix solutions are common, and they’re often made with the very best intentions. But what most families don’t realize is that DIY planning can cause more harm than good, especially when it comes to real estate and aging parents.
In North Carolina, “just putting someone on the deed” can trigger unexpected tax bills, Medicaid penalties, loss of control, and even family conflict. And sadly, I’ve seen too many well-meaning families suffer serious consequences because they didn’t realize what they were really signing away.
Let me show you what I mean.
A Simple Gift That Cost Her Everything
When Laura’s father passed away, she wanted to make things easier for her mother, Carol. The family home in Johnston County was paid off, and Laura figured it made sense to “just put Mom on the deed.” That way, if something happened to Laura, the home would be in Carol’s name and avoid probate.
No lawyer. No fees. Just a quick trip to the register of deeds, and the deed was changed.
Two years later, Carol needed nursing home care. And that’s when the nightmare began.
Medicaid declared the home transfer a gift. Because it happened within the five-year look-back period, Carol was disqualified from benefits. To pay for her care, the family had to spend down savings and eventually sell the home.
Laura was devastated. She thought she was protecting her mom. Instead, she triggered taxes, penalties, and heartbreak.
She wasn’t trying to do estate planning. She was trying to do the right thing. But as Laura would learn the hard way, “simple” isn’t always safe.
DIY Estate Planning: When Good Intentions Go Wrong
We live in a world of quick fixes: YouTube tutorials, online forms, TikTok legal advice. And when it comes to estate planning, it’s tempting to think, How hard can it be?
For many North Carolina families, adding a parent or child to a deed seems like a common-sense move:
“If something happens to me, at least Mom can stay in the house.”
“I don’t want the state to take it.”
“We’re just trying to keep it out of probate.”
But here’s the truth: what feels easy now can cause expensive problems later.
When a Son Lost the Home He Grew Up In
James added his mother, Helen, to the deed of his Clayton home thinking it would help avoid probate. But when James died unexpectedly, Helen became full owner. She assumed she’d leave the home to her grandchildren.
What Helen didn’t know was that James had a will naming his children as beneficiaries. But because the home had automatically passed to her by deed, the will didn’t apply. The kids didn’t inherit anything.
When Helen died two years later, the home passed according to her will which named a different set of family members entirely.
James’s children were completely cut out.
That wasn’t what anyone wanted. But, because of one “easy” deed change, the entire legacy shifted.
The Hidden Legal Risks of “Just Putting Someone on the Deed”
1. It’s a Gift in the Eyes of Medicaid
In North Carolina, transferring a home, or even part of it, without fair market value triggers the five-year Medicaid look-back rule. If your loved one applies for Medicaid within five years, the state may impose a penalty period, delaying access to crucial long-term care.
Key Point: Even if you didn’t mean it as a “gift,” Medicaid may still treat it as one.
2. Capital Gains Taxes Can Skyrocket
When you add someone to a deed while you’re alive, they get the cost basis at the time they were added to the deed. That means when they sell the home later, they could face huge capital gains taxes.
Compare that to inheriting property through a will or trust. In that case, your beneficiaries get a stepped-up basis, potentially saving them thousands.
3. You May Lose Control of the Property
If you give part of your home away, you no longer fully control it. The co-owner could:
Refuse to sell
Use their share as collateral
Have creditors place a lien on the property
Be involved in any future transaction (like refinancing or selling)
Even worse? If they get divorced or sued, your home could be caught in the crossfire.
4. Unintended Disinheritance
Let’s say you add your daughter to the deed. Years later, she passes unexpectedly. Now her spouse, or her in-laws, may have a legal claim to your home.
You didn’t plan for that. But the law doesn’t care about your intentions. It follows the deed.
A Medicaid Surprise in Wake County
Susan, a retired teacher in Wake County, added her daughter Angie to the deed when she started having memory issues. She didn’t want Angie to have to deal with probate. But within 18 months, Susan’s dementia worsened, and she needed to move to a memory care facility.
The family applied for Medicaid—but because Susan had “gifted” half her home to Angie within the five-year window, she was denied benefits. Angie was told they’d need to either pay for private care or undo the transfer (which they couldn’t).
They ended up selling the home to pay for care—leaving both Susan and Angie heartbroken and financially stressed.
There’s a Better Way: Legal Tools That Actually Protect
There are safer, smarter legal tools that can help you accomplish your goals without risking your family’s future.
Revocable Living Trust
Want to avoid probate and keep full control while you’re alive? A trust can help you:
Name who inherits your property
Avoid the public, slow probate process
Plan for incapacity
Maintain flexibility (you can change it any time)
Most importantly—it keeps your wishes private and enforceable.
Life Estate Deed (with caution)
This allows someone to stay in the home for life, with ownership transferring upon their death. But it must be carefully drafted to avoid Medicaid penalties and unwanted tax consequences.
Lady Bird Deeds (Enhanced Life Estate Deeds)
These are sometimes available in North Carolina and can protect the home while retaining full control during life and avoiding Medicaid estate recovery.
But they’re not right for everyone. And, a misstep here can be costly.
Long-Term Care Planning
If skilled nursing care is on the horizon, early planning is everything. Asset protection trusts, Medicaid-compliant strategies, and care coordination can help preserve savings, qualify for assistance, and reduce stress for everyone involved.
The Bottom Line: You Deserve Better Than a DIY Shortcut
Adding someone to your deed may feel like a quick fix. But in my experience, it’s a fast track to heartache.
If you wouldn’t do your own dental work or write your own tax code, please don’t DIY your family’s future.
Your home is likely your most valuable asset, financially and emotionally. It deserves thoughtful, customized planning.
Let’s Get It Right—Together
I’m Kristen Mackintosh, The Happy Lawyer® here in Garner, NC. I help families just like yours protect what they’ve worked hard for, navigate elder law with confidence, and preserve peace of mind.
If you’re thinking about adding a parent or child to a deed—or you already have and want to know what it means—don’t wait until it’s too late.
Schedule a consultation today, and let’s make a plan that actually works.
Or call us at (919) 336-4219 to schedule an a zoom or in person elder law appointment.
By Kristen Mackintosh, The Happy Lawyer® | Garner, NC
Because good intentions deserve good legal guidance.
