The Dangers of Jointly Owning Property
Consider – and remember – this story about Karl. He went to a hospital for open heart surgery. Karl decided to put his Florida condo into the names of his four grandchildren. He thought this was a good way to avoid income and probate taxes.
Karl did survive his surgery. However, when he visited a lawyer to update his will, he got a surprise. Here are the six dangers, all starting with the letter “D”, that Karl’s lawyer told him about.
This is a valuable lesson for you as well. Review this list before you consider holding property in joint ownership with anyone, including your children.
The Six Dangerous “D” Words
Joint owners can refuse to cooperate when you need to deal with the property. There is no law that says Karl’s family has to do exactly as he says.
Your child could die first, or at the same time as you, which means you must plan for other contingencies.
Creditors of bankrupt children can make claims against property.
Judges may have to decide if your intention, when creating the joint asset, was to make a gift or avoid probate.
Your estate family planning decisions should not force your family to go to court to prove a gift was intended. Why create problems when you can prevent them?
Always discuss with your lawyer the advantages and disadvantages of having jointly owned assets. Consider the risks and tax consequences carefully before you give up control of your assets.
Once someone is a joint owner, you are stuck. There is no law that lets you remove a joint owner without that person’s consent.
Even if anyone gives up rights to property, the will still needs independent legal advice. That advice can be costly and prevent you from getting what you want.June 21st, 2012