There are so many reasons to steer clear from jointly-held property that I could probably write a few pages on the subject. Since, however, I am sure most of my readers would prefer not to read several pages belaboring the issue I am going to make the point briefly instead. While there are many reasons for not holding property jointly depending on your circumstances, here are 3 that come up frequently:
Doesn't "Avoid" Probate - holding property jointly only
postpones probate of that property until the death of the second joint property holder.
Practice Tip - holding property in trust is one way to avoid probate of that property.
- Tax and Practical Limitations - if you put someone on the title to your house and then you want to sell the home, not only can it be hard on your relationship with that person if they don't want to sell, but it may also subject them to gift taxes if you sell your interest. Most people hold property jointly with people they care about and this can both negatively impact those relationships, and put their loved ones in a financial bind.
- Property Subject to Creditors' Attack - you may also be subject to the claims of a joint tenant's creditors to the extent of the value of the property. Even responsible people can end up in dire financial straits. Holding property jointly will not help you protect them or yourself in the event that the unforeseeable happens.
These are just a few of the problems associated with jointly-held property. There may also be capital gains issues, limits on sale, or other practical, legal, or tax consequences. Your situation is unique and may or may not involve one or more of these matters. If you have any concerns about this, or if you feel that you need to discuss this with an estate planning attorney in Connecticut, you can contact us by clicking here.