A major goal of most estate planning is to avoid probate. Probate can provide a major hurdle to your heirs when it comes to accessing your assets after death. As long as your probate ties up your assets, your heirs will not be able to use them.
A strategy that some individuals consider is putting the name of their adult child on the deed to their home, thus entering into a joint tenancy situation. While this is a way to help your property avoid probate, there are many negatives to doing so. In fact, this almost always causes problems according to InCharge Debt Solutions.
What is joint tenancy?
Joint tenancy is when there are multiple names on the deed to a property. Joint tenancy helps to avoid probate due to the right of survivorship. Essentially, if there are two people on the deed to a home and one of them dies, the surviving owner automatically inherits the house. The property does not go through probate.
What are the problems?
Joint tenancy also makes all names on the deed equal owners. There is no difference between the individual who has owned the property for decades and the person put on the deed yesterday. For example, if your adult child does not pay his or her taxes, it is possible that the IRS will put a lien on your home if your child holds the property in joint tenancy.
This is also problematic if your adult child marries and divorces. You may end up battling your child’s ex-spouse to maintain ownership of the property. A better way to avoid probate in this situation is with a living trust.