Adding Heirs To A Title is Not Always a Good Idea
In Georgia, property owners can either own real estate with another person as tenants in common, or as joint tenants with survivorship. Georgia does not have Tenancy by the entirety, although other states do.
With Tenants in common, if an owner passes away, that person’s heirs inherit their portion of the property.
If they owned the property as Joint Tenants with the right of survivorship, the property passes to the surviving owner. This is great for married couples who want to leave the property to their spouse without going through probate. It is not always the best tenancy if a person is on their second or third marriage.
There are several issues with adding someone to a title as a substitute for probating an estate, though.
a. Any liens or judgments against that person will attach to the property. This includes past and any liens filed in the future.
b. Inheriting property instead of being added to the title actually has some tax benefits. Being added to a title as a joint tenant eliminates the tax benefits of inheriting real estate, and gifts are often taxable.
c. Adding a child to a title is not always a good idea. Conveying property to a child under the age of 18 years old creates a whole list of problems, such as the inability to sign for loans and sale of the property.
So be careful who you add to the title, and why. It is not always the best way to avoid probate. Probating an estate can have tax advantages, and is much easier with a will.
John C. Bennett is a real estate closing attorney and owner of Origin Title and Escrow, Inc.. Since 2003, Origin Title has handled real estate transactions – purchases, refinances, reverse mortgages – quickly and professionally. There will be no surprises, nothing misunderstood. Title searches are thorough and well-reasoned, to avoid unpleasant surprises later down the road. Calculate your closing costs in Georgia or Florida using our calculator or contact Origin Title using this form.