There are various different ways to get assets into the hands of your loved ones after you pass away. When you talk with people around the water cooler, you may hear about some so-called “simple solutions.” You may want to take pause before buy into these notions, because we all know about the perils of easy answers. With this in mind, we will look at the matter of joint tenancy in this post.
Joint Tenancy With Right of Survivorship
The condition of joint tenancy is simpler than it may sound. A joint tenant is the co-owner of property. You could add your child to the title or deed of property that you own, and your child would become a joint tenant.
The process of probate becomes a factor when you pass away in direct personal possession of property. If you were to leave a piece of property to your child in your last will, the property would become probate property at first. The transfer would not take place immediately. Your child would take possession of the property after the estate was probated and closed by the court.
This can be time-consuming, and there are expenses that can pile up during probate. It is possible to avoid probate with joint tenancy, because it typically comes with rights of survivorship. You make your child the co-owner of the property, and he or she would inherit the entirety of your property after you die. The transfer would take place outside of the process of probate.
Joint tenancy can sound like a good idea on the surface, but there are some potential drawbacks to consider before you dive in head first.
When you plan your estate, you typically arrange for the transfer of property after you pass away, not before. However, when you make someone a joint tenant, you are surrendering half ownership of the property right away.
If you make your child a joint tenant, he or she owns half of the property, plain and simple. This can create problems for you if your child was to run into financial difficulties. His or her portion of the property could be attached by creditors, and it would be in play if your child was the target of a lawsuit.
The property that is held in joint tenancy could also be on the table during divorce proceedings.
In addition to the above, you could not sell the property without the approval of the joint tenant, and this could become an issue at some point in time.
Free Report on Joint Tenancy
In this post we have scratched the surface. If you would like to learn about joint tenancy in greater detail, download our special report on the subject. The report is being offered free of charge, and you can obtain access through this page: Joint Tenancy Special Report.
Parman & Easterday