Avoiding probate is a paramount concern for many seniors who are setting up their estate plan. There are many good reasons to avoid probate. Generally speaking, the public nature of probate is distasteful for many, and it can be expensive and time-consuming.
However, many people end up making their lives very difficult in the quest to avoid probate. For example, many seniors wonder if taking advantage of joint tenancy will help their heirs avoid the probate process. According to In Charge Debt Solutions, while joint tenancy will help you avoid probate, it comes with more negative than positives.
What is joint tenancy?
There are a variety of ways for multiple people to jointly own property. Joint tenancy would be if you put your adult child’s name on the deed to your home. In this way, when you die, the house will pass automatically to your child without needing to go through probate. This is the “right of survivorship.”
Why is this a bad idea?
Putting your child’s name on your deed may seem like a good idea, but many seniors have run afoul of this. Once you put your child’s name on the deed to your property, it instantly becomes their property as much as yours. This means that if you want to take out a line of equity or sell the property, you need to have your child permission to do so.
Additionally, depending on your child’s financial situation this can cause problems. For instance, if the IRS puts a lien against your child for not paying taxes, your house may be at risk. If your child has to file Chapter 7 bankruptcy, your house may also be at risk for liquidation.