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Can joint tenancy help me avoid probate?

On Behalf of | Aug 11, 2020 | Estate Planning |

In the majority of cases, people engaging in estate planning try to avoid probate as much as possible. Probate can be expensive and time-consuming. Additionally, many people do not like the public nature of the process.

However, this does not mean that all strategies to avoid probate are good ones. Many people try to put their adult child on the deed to their home in an attempt to avoid probate. This is almost never a good idea. According to InCharge debt solutions, putting your child’s name on your property can cause you serious problems.

How does this help avoid probate?

Individuals who choose to do this are relying on the premise of joint tenancy. With joint tenancy, if one owner of a property dies, the surviving owner automatically inherits full ownership of the property. This is the “right of survivorship.” In this instance, probate is not involved.

What are the potential problems?

Putting your adult child on the deed to your home makes that child an automatic owner of your property right away. This means that any issues that your child encounters could cost you your property. For example, if your child has to file Chapter 7 bankruptcy and their name is on your deed, the courts might require you to liquidate your property to pay your child’s creditors.

Another example is if your child marries and then gets divorced. The courts will consider your property part of joint marital property if your child’s name is on the deed. This means that you could potentially end up with your child’s ex spouse as a partial owner of the property.