Instantiated Objects Inside of Walls

when i instantiate an object (using raycast), it ends up stuck in the object that the raycast was collliding with. How do i fix this?

heres my code:

 function Update () {
     var ray = Camera.main.ScreenPointToRay (Input.mousePosition);
     Debug.DrawRay (ray.origin, ray.direction * 50, Color.cyan);
     var hit : RaycastHit;
     if (Physics.Raycast (ray,hit)) {
         if (Input.GetMouseButtonDown(0)) {
             Instantiate(object, hit.point, transform.rotation);
         }
     }
 }