Estate Planning Is Not About What You Own... It's About What You Value.

Adding children to asset titles

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Many people assume that adding others as a joint owner of assets is an easy way to enable management of an asset and/or avoid probate of their estate after death. We STRONGLY advise that you consult with a competent estate planning specialist before taking this route, as the unintended consequences of doing so can cause your family untold nightmares.
We recently saw a great example of how putting someone else on title to a property for management purposes ended up causing astronomical difficulty for a family. The children and their father purchased a home next to their mother’s home (parents had previously divorced), but instead of holding title in their names, they deeded the house to their mother, even though they still considered themselves the actual owners, “because she lived next to it and could care for it and none of them lived nearby.”
Mother then later deeded the property to herself, the children and her new husband as joint tenants. She also deeded her home next door to herself, one daughter and the new husband as joint tenants. The family claims she had intended to include her ex-husband and not the new husband (and the new husband actually agrees with this claim), but new husband is now on title and subsequently goes into a nursing home where Medicaid is paying his bill.
Mom and new husband go to a local (non-specialist) attorney and ask for Wills to be drawn up leaving the neighboring property to Mom’s grandchildren and her home to her children. The attorney never bothers to inquire how title is held in order to ensure that the Wills are eventually effective at accomplishing this distribution pattern.
Mom has since passed away. Medicaid won’t let the new husband transfer his interest in either property back to the family, otherwise they will penalize him and deny him nursing home benefits. The Wills have no effect on the transfer of the properties, because the surviving joint tenants automatically receive mom’s interest under Utah code, regardless of what a Will might say.
We aren’t even addressing the tax consequences of all these transfers.
Morals of the story: 1) NEVER add anyone to title of assets for “management” purposes as a substitute for proper estate planning; 2) Find an experienced estate planning SPECIALIST to consult with before engaging in any such actions (if anyone just prepares a Will or Trust without asking about the assets involved, they are likely committing malpractice, as was the case in this example); and, 3) taking shortcuts to avoid minimal costs up front can result in astronomical costs down the line.