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PROBLEMS YOU MAY CREATE WITH A JOINT TENANCY
1. Generally, a joint tenancy is created to avoid entering court proceeding in probate at the death of the first joint tenant. However, it does not avoid probate at the death of the second joint tenant unless he/she puts that asset in his / her own trust after the first joint tenant dies.
2. While both joint tenants are alive, each of their creditors can execute a judgment against each of their shares. So, if you put your son on title and your son gets sued, a judgment against him can be executed against 1/2 of the property. In essence, it is a poor asset protection method.
3. If you put your married child on title, and a mortgage is paid during his marriage, in the event of his divorce, his spouse can claim a community interest against that property, if the mortgage is paid from their community wages. This ties up your property in their divorce proceeding.
4. When a person leaves an asset to a child in trust, there is a step-up in basis which avoids a large capital gains tax. When you put an asset in joint tenancy with your child during your life, this huge benefit is lost and there is no step-up to the date of death value as to the interest you gave your child during your life.
5. Joint Tenancies can completely thwart a person’s estate plan. For example, if you leave all of your assets in your will to all of your children, but leave one child as a joint tenant on one property, the child on title will inherit all of that one property and your entire estate will not pass equally to your children.
6. If you give a joint tenancy interest to a child while you are alive, and the value of the tenancy is more than $14,000, you have to file a gift tax return for it, and use some of your lifetime exemption.
7. A Joint tenancy is not a protection in the event of incapacity. If you put a child on title, you must obtain a power of attorney from him/ her so that if he/she is incapacitated, you can sell the property. Likewise, if you become incapacitated, the child you put on title will necessarily need to have a Durable power of attorney from you to be able to sell the property in the event of your incapacity.
8. If you put a child on title, you will need that child’s consent to sell the entire property in the future. Remember that your son or daughter-in-law may influence your child in this decision.
9. If you want to go borrow on a property which has your child as a joint tenant on title, you will need to get the consent of the child to borrow on your own property.
10. If you have a tenant in the jointly owned property whom you want to evict, you will need th epermission or consent of the other co-owner. If the tenant is your co-owner, you cannot evicthim or her.
11. If you forget to obtain a Parent-Child exclusion from reassessment from the County Assessor, your property tax will be reassessed. There are several form that have to be prepared to enable your property to escape reassessment at the time of transfer to your child.
A. Call us and put your house in your trust and leave it to your children at your death.
To discuss more aspects of joint tenancy, call our joint tenancy attorney at 818.340,447 in Los Angeles. Each attorney at Sirkin Law Group, P.C. has over 22 years of experience in joint tenancy issues and fixing problems relating to joint tenancy in Los Angeles Ca.
Joint Tenancy Problems
Problems with Joint Tenancyby