I often talk to different groups about estate planning, both in seminars and in our offices. Sometimes, widows or widowers ask questions about adding one of their children to their home’s deed as Joint Tenants with Right of Survivorship. In simple terms, this means that when the parent passes away and their death certificate is recorded, the house automatically belongs to the child. It seems like an easy solution without any issues, right? Well, it might not always work out that way. Here are some potential problems with Joint Tenancy and why we usually advise against it.
First, when a parent adds their child as a Joint Tenant, both of them have complete rights to the home, not just half each. Because of this, if the child is sued, the parent’s house could be at risk in the lawsuit. This isn’t what either the parent or child intended, but it’s one of the possible unintended consequences.
Here’s a fictional example: John and Mary have been married for over 40 years and have two children, David and Samantha. Sadly, Mary gets sick and passes away. A few months later, John adds his son David to the deed as Joint Tenant with Right of Survivorship to avoid probate. John later remarries and decides to move to Hawaii with his new wife. He asks David to sign the deed so he can sell the house and use the money for their move. But David is worried about his dad moving and doesn’t want to sign, saying the house is part of his inheritance. Can David legally stop the sale of his father’s home? Yes, because he has full rights to the property as a Joint Tenant.
Trying to handle things on your own can lead to unintended consequences that might seriously affect your life. Creating a proper estate plan with a Living Trust is the best way to avoid probate while still giving you the flexibility and control to deal with changes in your life and circumstances.
For more information about probate on a house or any other estate planning matters, you can schedule a free consultation with an estate planning attorney by calling 888.222.1328.
- Beyond Probate: Understanding the Drawbacks & Alternatives - September 1, 2023
- DIY Estate Planning: Worth the Risk? - August 31, 2023
- Use These Questions to Develop an Estate Plan Outline - August 30, 2023