When it comes to real estate, many people try to avoid probate by adding another individual’s name to a piece of property. This tends to work out okay for spouses, but it can lead to trouble for people who hold property as joint tenants with another relative or non-family member. If you hold real estate with someone else as “joint tenants with the right of survivorship,” your interests may be more vulnerable than you realize.
You May Still Need Probate
A joint tenancy does not really obviate the need for probate. In most situations, it simply delays the probate process until the second (or, when there are multiple joint tenants, the last surviving joint tenant) dies. If you own your property in joint tenancy with someone else, it is correct that the surviving tenant will automatically inherit the other person’s share upon the other tenant’s death. When the surviving tenant passes away, however, the property must still go through probate unless the surviving tenant has arranged for the property to pass directly to a beneficiary.
Most people associate estate planning with old age. In fact, younger individuals are more likely to die in sudden accidents, such as motor vehicle collisions. If you and a joint tenant, such as a spouse, die in a common accidents, your heirs must put two estates through probate.
If you and your spouse have a blended family with kids from prior relationships, you may inadvertently end up disinheriting your children by titling your real estate jointly with your new spouse. When you die, your spouse will automatically inherit your share of the property. From there, he or she has the right to pass it on to anyone – and it may not necessarily be your kids.
Disagreements about Transfers
When two or more individuals co-own property, they must all agree before selling it or otherwise encumbering it. For example, in a case where several siblings inherit property from a parent, each person must sign off on a sale price before the property can be sold. If one sibling holds out, this can lead to a serious conflict.
Many older people believe it is a good idea to add their adult child or children as joint tenants to their real estate. When the parent passes away, their kids inherit the property. The downside to this plan is it exposes the property to any creditors of the child or children. If the child experiences financial problems, his or her creditors may place a lien on the real estate. If the child files for bankruptcy protection, the trustee may sell the property to pay the child’s creditors.
Roseville, California Estate Planning Attorneys
Fortunately, there options to protect yourself and your real estate from the possible drawbacks of joint ownership. Call Yee Law Group Inc., PC today at (916) 599-7297 to speak to an experienced estate planning lawyer about your needs and goals.
This website has been prepared by Yee Law Group Inc., PC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.