adding people to the deed

[Betsy13]

my son and i bought a house this year,   my other son and grandson live with us and we each pay our portion of the household bills including the mortgage, taxes, upkeep and such.

I plan to add those two onto the deed, how will that work for tax purposes?

Is it better to have them just become owners if we the deed holders pass away?

[pmurphy3]

If a group are contributing to the household expenses, it is best if there was a written agreement between/among the parties outlining the responsibilities.   It would be similar to a partnership agreement.   

As for adding names to the deed, it is helpful in the event of the original owners passing.   It shows that they have ownership rights in the property.   However, that is really not a tax question and you may have to obtain legal counsel.

[NateTheGrEAt]

To add to @pmurphy3's answer - be aware that if you add people to the deed, this is considered a gift and they take on a share of your basis (purchase price) for future capital gain calculations. 

Whereas, if these same people are allowed to inherit the property, they receive a step-up in basis to the current value of the property at that time.

So, for future tax planning, it is possible you could be setting the family members up to pay more tax than required by adding them to title now. 

This all is dependent on who lives in the house and how much value the house appreciates between now and whenever you are no longer here, but it is a tax planning consideration.