Morris Hall, PLLC

Estate Planning Attorneys

MakePayment with multiple options
CALL NOW: 1 (888) 222-1328
  • Home
  • Our Firm
    • About Morris Hall
    • Attorneys
    • Our Team
    • Morris Hall Core Values
    • Communities We Serve
      • Arizona
        • Carefree
        • Flagstaff
        • Mesa
        • Oro Valley
        • Phoenix
        • Prescott
        • Scottsdale
        • Sedona
        • Tucson
    • Career Opportunities
  • Our Services
    • Asset Protection
    • Probate
    • Tax Planning
    • Trusts
    • Trust Administration
    • Wills
  • Resources
    • Blog
    • Do I Need an Estate Plan?
    • Elder Law Reports
    • Elder Law Resources
      • Phoenix Elder Law
      • Tucson Elder Law
    • Estate Planning Problems
    • FAQs
    • Probate Resources
      • Probate
      • Flagstaff Probate
      • Phoenix Probate
      • Sedona Probate
      • Tucson Probate
    • Published Books
      • Don’t Go Broke in a Nursing home
      • Tax Free Money for Long-Term Care!
    • Recent Law Changes and Improvements Affecting Arizona
      • Update My Living Trust
    • Reports
    • Videos
    • What to Do When Death Occurs
      • What Not To Do When Someone Dies
      • Who To Contact After A Loved Ones Death
  • Reviews
    • Testimonials
    • Review Us
  • Locations
  • Events
    • Seminars / Webinars
    • Past Webinar Recordings
  • Contact
    • Consultation Policy
    • Contact Us
    • Discounts

JOINT TENANCY DANGERS!

December 18, 2013 by Morris Hall, PLLC Leave a Comment

A very common way to hold title to an asset between spouses and non-spouses is by way of joint tenancy. However, after reading the following dangers outlined below, you will want to see an estate planning attorney to review your estate plan to avoid these pitfalls.

Danger #1: Only delays probate. When either joint tenant dies, the survivor — usually a spouse or child — immediately becomes the owner of the entire property. But when the survivor dies, the property still must go through probate. So joint tenancy doesn’t avoid probate; it simply delays it.

Danger #2: Probate when both owners die together. If both owners die at the same time, such as in a car accident, the property must still go through probate.

Danger #3: Unintentional disinheriting. When blended families are involved, with children from previous marriages, here’s what often happens: the husband dies and the wife becomes the owner of the property. When the wife dies, the property goes to her children, leaving nothing for the husband’s children.

Danger #4: Gift taxes. When you place a non-spouse on your property as a joint tenant, you make an immediate gift of one-half the value of the property. For example, when a mother re-titles her $80,000 home in joint tenancy with her son, she has just given her son a $40,000 gift. The mother is liable for gift taxes and the filing of a gift tax return. Fortunately, she does not have to pay the taxes until she has used up the Unified Federal Credit.

Danger #5: Loss of income tax benefits. If a person inherits a home through a will or living trust, the heir can sell the property without paying any income tax. But when a property has been held in joint tenancy, the surviving owner must pay income tax on the amount of his capital gain. This is called a step up in basis.

Danger #6: Right to sell or encumber. Joint tenancy subjects the property to each owner’s financial dealings. Either joint tenant has the right to mortgage or sell his half interest.

Danger #7: Financial problems. If either owner fails to pay income taxes, the IRS can place a tax lien on the property. If either owner files for bankruptcy, the trustee can sell that person’s interest in the home.

Danger #8: Court judgments. If either party has a judgment entered against him, such as from a car accident or business dealings, the holder of the judgment can and will execute the judgment against the home.

Danger #9: Incapacity. If either joint owner becomes physically or mentally incapacitated and can no longer sign his name, the probate court must give its approval before any jointly owned property can be sold or refinanced — even if the co-owner is the spouse.

If you own any assets as joint tenancy, it’s critical that you meet with an estate planning attorney to review your option(s) in order to avoid these dangers. Don’t put this important review at the bottom of your “to-do-list!” Our experienced estate planning attorneys are ready to assist you and will conduct a complimentary estate plan review.

About Morris Hall:
At Morris Hall, we have focused our legal practice on estate planning for over 40 years.  Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects.  We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Cave Creek, Tucson, Prescott, Flagstaff and Arrowhead.    Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.

  • Author
  • Recent Posts
Morris Hall, PLLC
Morris Hall, PLLC
Morris Hall, PLLC
Latest posts by Morris Hall, PLLC (see all)
  • What Is a Senior Life Settlement? - January 27, 2023
  • Most Used Estate Planning Documents - January 26, 2023
  • How to Help Older Parents from a Distance - January 24, 2023

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

MH logo

Main Office

7600 N 16th St, Ste 105

Phoenix, AZ 85020

Phone: 602-249-1328

Fax: 602-248-2887

Subscribe to Our Newsletter

For a sample Click Here

Offices

Our law firm proudly serves many areas in Arizona. See all of our locations here.

Our law firm proudly serves the state of Arizona.  See all of our locations here.

Toll Free: 888-222-1328

Mon-Thur: 8:00am – 5:00pm
Fri: 8:00am – 4:00pm

  • Linkedin
  • Twitter
  • Facebook
  • Youtube
  • Instagram

Need an Estate Planning Lawyer in Arizona?

Looking for an estate planning attorney near you? We have office locations in Phoenix, Mesa, Chandler, Scottsdale, West Valley, Carefree, Prescott, Sedona, Flagstaff, Tucson, and Oro Valley in Arizona so please visit us at the location that is closest to you.

  • © 2023 American Academy of Estate Planning Attorneys, Inc All rights reserved.
  • Disclaimer