If you own real property, and you want to keep that property out of probate after you are gone, you may have considered putting the property in your adult child’s name. Creating the right type of co-ownership with your adult child may be a better option. While you will get probate avoidance benefits by creating a joint tenancy, there are other factors you should consider before using that strategy for your real property. The Woburn estate planning attorneys at DeBruyckere Law Offices discuss options for putting real property in your adult child’s name.
Is Joint Tenancy the Right Option?
Simply transferring property into an adult child’s name is not always the best choice because you give away all legal rights to the property. Creating a joint tenancy can often accomplish the same goal without giving away all your rights. On the other hand, while joint tenancy is an effective method of transferring ownership to an adult child without the property being held up in probate for months, even years, you should look at the big picture before deciding to go that route. Keep in mind, for example, that once you put your child on the title to your property your child has an ownership interest in the property. That interest can be encumbered, meaning there are risks to adding a child to the title. If your child is married, his/her spouse could end up with rights to the property in a divorce. Furthermore, if you ever need to qualify for Medicaid benefits the property will still be considered to be an asset of yours and could disqualify you for benefits. Using joint tenancy may be a good strategy for your estate plan; however, it is imperative that you discuss the advantages and disadvantages of using the strategy with your estate planning attorney before you decide on a course of action. Failing to do so could result in unintended negative consequences.
What Types of Joint Tenancy Should I Create?
The types of co-ownership available vary by state. In New Hampshire, there are three different types of joint tenancy that can be created. Understanding the difference between the three is crucial. Tenancy in common can be used by any two or more co-owners. If you and a child hold property as tenants in common you each hold a percentage share of the property. Your share will not pass directly to the co-owner upon your death. Instead, your share in the property will become part of your estate and be passed down according to the terms of your Last Will and Testament or the laws of intestate succession. In other words, owning property as tenants in common does not provide any real estate planning advantage as the property still has to go through probate.
The other option is joint tenants with rights of survivorship (JTROS). This type of co-ownership means that you both own the entire property. If you die, your interest in the property will automatically transfer to the co-owner without the need for the property to go through probate which is the primary estate planning benefit you get from co-ownership.
Contact Woburn Estate Planning Attorneys
If you have additional questions or concerns, please contact the Woburn estate planning attorneys at DeBruyckere Law Offices by calling our New Hampshire office at (603) 894-4141 or our Massachusetts office (978) 969-0331 to learn more or visit our website at https://dadlawoffices.com .
No. Medicaid using a five-year look-back period when assessing an application. Asset transfers made during that time period could count against you and result in a waiting period.
If you own the property as tenants in common your co-owner may be able to mortgage his/her share of the property but not the entire property.
Yes. Creating a trust and transferring the property into the trust allows it to be distributed to your chosen beneficiary without the need to go through probate after your death.