Page 4 - Estate Planning 101 - 201312
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What will happen to my home “Real If a couple owns property (either outright or mortgaged) as Joint Tenants and one of the
Property”? (Continued) spouses passes away, then the surviving spouse will have complete and immediate
ownership of the property without probate. This is called “Joint Tenancy with Full
Rights of Survivorship”. When the surviving spouse passes away or if the couple passes
away at the same time, the property must go through probate before it can be
distributed to the heirs.
Joint tenancy is common between spouses that buy property and want to share
ownership, including inheritance rights. But transferring property to joint tenancy with
someone else (such as children) simply to avoid probate creates several problems. For
example, if a couple put their adult children on their property as joint owners, they
would give up partial ownership of the property. The new owners could sell or
mortgage his or her share, or it could be lost to their creditors in a severe debt situation.
The property could also be lost if one of the children was sued, had a bankruptcy, got
divorced, had an IRS tax lien, etc. Also, if one of the joint tenants became
incapacitated and could not make decisions about the property, the other owner would
have to go to court to get the authority to sell it or obtain a mortgage. Additionally,
when putting other joint tenants on property, there may be capital gains problems when
the property is sold.
ESTATE PLANNING 101
