If you own real estate, part of your estate planning will include deciding what happens with it after your death. You can choose the probate court decide, or you can take action now so that the property is not tied up in court for months. One possible method of taking care of your property is to use joint tenancy. If you are considering this, here is what you need to know.
What Is Joint Tenancy?
Joint tenancy is possibly one of the simplest methods for dealing with property in estate planning. Instead of complicating your planning by leaving the property in a trust, you only have to add the name of your beneficiary to the deed.
Regardless of your relationship with the beneficiary, you can add his or her name to the deed. For instance, if you want to leave the property to your business partner, you can do so with joint tenancy.
After your death, the beneficiary on the deed will automatically become the owner of the property. Since the property naturally transfers, there is no need for it to go through probate court.
Why Should You Use Joint Tenancy?
Outside of the chance to avoid probate court, there are other reasons that you should consider using joint tenancy. For instance, you are not limited in who you can place on the deed. You can list two or more people and they all get a share of the property.
Joint tenancy also could help protect your property from a creditor's claim. Since you lose ownership of the property after death and the beneficiaries take sole possession, the property is no longer considered part of the estate. As a result, your beneficiaries do not have to worry about losing the property to creditors.
There are a couple of drawbacks to using joint tenancy that you should consider though. Your beneficiary cannot use joint tenancy in the future in his or her own estate planning. He or she would have to find another way to avoid probate court.
Another potential problem is that if you and the other owner die simultaneously, the property will have to go through probate. Probate could potentially tie up the property for months.
Before deciding on a method for handling your property in estate planning, talk to an experienced attorney or visit a site like http://valentineandvalentine.com. He or she can help you decide if joint tenancy or another method is right for your situation.Share
13 March 2017
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