People have all kinds of ideas about how to avoid probate. Some are better than others. One particularly bad idea in most situations is to add a child to the deed on your house as a joint tenant. Before you consider that option, you should speak to an estate planning attorney about your alternatives.
If you do add a child to your home’s deed as a joint tenant, the property will automatically pass to your child when you pass away. It will not have to go through probate. However, there are severe drawbacks in the here and now that should dissuade you from blindly adding a child as a joint tenant. First, your child may have to pay taxes on the property. The child will have to pay capital gains tax on the difference between the purchase price and the fair market value on the property at the time you pass away. That can create a severe financial burden on your child. Not only are there tax considerations for your child, but the property may become attachable by your child’s creditors. Even if your child does not have any bad debts now, he or she might later accrue them. This will inhibit your ability to sell the property if it becomes necessary to do so.
An estate planning attorney has many other options available to help you avoid probate. Make sure that you make the right decisions by speaking to an experienced attorney.
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