When a property owner dies, unless she held title to the property jointly with someone else, the Estate of the deceased would pay probate taxes based on the value of the property at the time of death. As a means of avoiding payment of these probate taxes, a property owner may consider adding an adult son and/or daughter to title as joint tenants with the property owner while she is alive. Upon the death of a joint tenant, the survivor becomes the sole owner of the property. There are risks involved with holding title to property in this manner.
The son and/or daughter’s consent would be required for any futures dealings with the property, including any mortgage refinancing and sale transactions. In addition, if the son and/or daughter were to ever move into the property with a spouse as their family residence, the spouse’s consent would also be required for any future dealings with the property. Finally, if there were a judgement against the son and/or daughter, the creditor could register a lien on the property (also called a writ of execution). In that case, the property could not be sold or refinanced until and unless the creditor is paid and the lien is removed from the property. If a property owner wishes for her son and/or daughter to own the property after she dies, she could make provisions in a will to reflect her wishes. The Estate would have to pay probate tax on the value of the home. However, one must weigh this cost against the possible downsides, as outlined above.