Using Joint Tenancy As An Estate Litigation Tool

Partner Nancy Ling regularly advises clients in the practice areas of wills, trusts, estate and incapacity planning, estate administration, residential and commercial real estate, property matters, corporate transactions and business law.

In this edition of Legal Matters, she discusses whether or not to hold a piece of real estate property in joint tenancy with someone within your family and what the risks are in doing so.

Transcript:

Many estate planning discussions involve whether or not to hold real estate in joint tenancy with your heirs. Joint tenancy is used as an estate planning tool because it comes with a right of survivorship, meaning that if one owner dies, the survivor acquires the deceased interest in the property automatically. If a property is held in the deceased's sole name or owned as tenants-in-common, then there is no right of survivorship, and your heirs will need a grant of probate. There are risks involved with putting someone on the title to your home, especially if they are not truly an owner. Once a person is on the title, there is a loss of control because you will need their signature to do anything with the property, mortgage, refinance, sell, etc. Also, the property could be vulnerable to their creditors. For example, if they are in litigation, divorce or bankruptcy, you could end up with a lien on your property. Lastly, there may be capital gains issues if you put someone on title who does not live there. There are ways to mitigate these risks when appropriate, so if you have questions about whether joint tenancy is right for you, contact FH&P Lawyers.