The Joint Property Deed is a popular estate planning deed
option because of its many advantages. A Lady Bird life estate
deed is also popular and should also be considered.
In a Joint Property Deed you add children or other loved ones as joint owners with rights of survivorship to your home or other real estate. The survivorship language simply means that upon your passing, the surviving joint owners inherit the real property automatically because they survived you. Since the child or loved one you have added to the title obtains a present vested interest, your control of the property will be limited.
A Joint Property Deed has these important advantages:
Since the survivorship right to your named joint owners happens automatically upon your passing, the cost and delay of court-supervised probate are avoided.
The fact that the loved ones you have named have vested rights protects your real estate from scam artists and bad people who want to take your property, and it also protects your land from the claims and interference of a second spouse if the surviving spouse remarries.
A Joint Property Deed allows you to maintain the homestead exemption [called the PRE] for the school tax part of property taxes—typically saving about 50%.
A Joint Property Deed also allows you to avoid uncapping the freeze on the taxable value of land—preventing a nasty increase in property taxes to the higher State Equalized Value [SEV].
After a five-year waiting period, a Joint Property Deed may lessen the risk of losing property if you enter a long-term care and need public benefits for the $120,000 annual cost.
Finally, a Joint Property Deed gives your loved ones an income-tax free inheritance—allowing inherited land to be sold tax-free.
But the Joint Property Deed has these drawbacks:
The vested rights of your named loved ones means that their consent will be needed if you want to sell. This problem can be lessened by having them signing a cooperation agreement. You should not use this deed strategy if you have any doubts about whom you name. A better option on this issue is a living trust.
The vested rights of your named loved ones expose your property to the divorce and creditor claims of your named loved ones. Again, you should not use this deed strategy if you have any doubts about whom you wish to name. A better option on this issue is a living trust.
If you set up a Joint Property Deed but enter long-term care within the five-year look-back period, your home can still be saved by redoing title into a Lady Bird Deed and but there are no options to save non-homestead land.
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