Joint ownership of property is often seen as a quick way to avoid probate. When one owner dies, the other automatically inherits the asset—no court required. But what looks like an easy solution can lead to major problems.
First, joint ownership exposes you to the other owner’s liabilities. If they get sued or file for bankruptcy, creditors may come after the jointly held asset.
Joint ownership also raises tax concerns. If you add an adult child to your home’s deed, you could trigger capital gains tax when the home is sold. Rather than inheriting the property with a stepped-up tax basis, they may face a large tax bill on decades of appreciation.
When you share ownership of real estate, you also share decision-making power. Want to sell or refinance? You’ll need your co-owner’s full cooperation. If they say no, you may be stuck—or forced into an expensive legal battle to force a sale.
Adding an unmarried partner to your home may count as a taxable gift under IRS rules.
Second, your estate plan may be undermined. Joint property passes outside your will, so if you name only one child as a joint owner, your other children could be cut out entirely—even if your will says otherwise.
Third, blended families complicate matters. A surviving spouse who inherits joint property can remarry, diverting assets to a new partner or their children—disinheriting yours.
Joint ownership seems appealing, but it carries long-term consequences that often go unrecognized. In the next part, we’ll explore how joint ownership can create legal roadblocks during incapacity and safer alternatives to joint ownership that preserve control and protect your family’s future.
If you have questions about your estate plan, schedule a free consultation today by calling our office at (561) 694-7827 Elder and Estate Planning Attorneys PA, 480 Maplewood Drive, Suite 3, Jupiter, FL 33458. The content of this article is general and should not be relied upon without reviewing your specific circumstances by competent legal counsel. Reliance on the information herein is at your own risk, as it expresses no opinion by the firm on your legal needs. An attorney client relationship is not created through the information provided.
