Estate Planning is not as easy as it appears. When something appears easy (think about Miguel Cabrera’s or Ted William’s hitting prowess), it is because there are countless hours of preparation, review and practice to achieve the high result. Remember, brain surgery is “easy” for a brain surgeon.
Same holds true for estate planning. Whether you feel you can “do it on your own”, or you enlist the help of an attorney who does not focus her practice on estate planning, you may end up with unintended (and many times, harsh) consequences.
Unless all of the potential issues and concerns are contemplated, you may end up solving one issue and creating many, many others!
Holding property as joint tenants with rights of survivorship can be a useful tool to solve the problem of probate. However, by doing this, you have inadvertently exposed yourself to a myriad of other problems:
- This is a gift, so there may need to be a gift tax filing
- There are capital gains tax implications
- The person you are holding the property with can use the property as collateral
- The property is exposed to the person’s creditors (i.e. if that other person gets sued)
- The property can be part of that person’s divorce settlement
- The other person has the power to prevent a sale of the property
These are not issues to be taken lightly!
We had a client; he had recently lost his wife. So he decided, without consulting with us, to hold his home as joint tenants with rights of survivorship (“jtwros”) with his son. He did not want his son to have to go through the probate process on his death. So the jtwros solved that problem. However, after six months of living in the home on his own, he realized it was too big for him – the 4500 square foot, family home was too much to maintain. So he decided that he wanted to move into a condo. But when he went to sell the home, his son blocked it – his son did not want the home sold. The son wanted his kids to be able to visit and ultimately inherit the home that he grew up in. And because the home was owned as jtwros, the son was able to legally block the sale.
Without the proper advice, our client created a huge issue – not only legally, but emotionally as well. When it comes to planning your estate, make sure that all of the issues are contemplated, and a solution is put in place that achieves your goals.
We would be happy to sit down with you to talk about your situation and discuss the options and solutions.
Contributed by MH Estate Planning Attorney James P. Plitz.
Why Choose Morris Hall:
You have a number of options when it comes to estate planning, so why pick Morris Hall? First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters. Also, MH is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones. We are one of only two firms in Arizona that belong to the AAEPA and are the only firm in that has been granted membership. If you have assets and loved ones that you want to protect, you are in good hands with MH. 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.
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.
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