Adam D. Martinez | Chairman of Real Estate Litigation Department
Question: My husband and I own a home in North Scottsdale. We also own a condo in Ahwatukee that we currently rent. Our wills state that if both my husband and I pass away, our homes go to our daughter. However, we understand that a will does not avoid probate. Should we add our daughter’s name to the title of our homes now in order to avoid probate?
Answer: No. Even if done correctly, becoming joint owners with survivorship rights solely to avoid probate is fraught with peril and not good estate planning. First, there are certain tax benefits to inheriting a home versus owning it jointly. Second, adding your daughter now results in a loss of ownership and control. Even though there is likely trust between all parties, you cannot sell, gift, transfer, or mortgage the home without your daughter’s signature. Third, if your daughter has a business, creditors or is sued (even if she is not at fault), the homes could potentially be in jeopardy because they are considered part of her assets. Finally, circumstances can always change. Issues like marriage or divorce could expose you to unanticipated risks with parties you never intended to be involved with.
Fortunately, there are better options. Trusts are common estate planning tools. However, even a simple beneficiary deed can accomplish your goal as either an alternative or a supplement to a trust or estate plan. A beneficiary deed is a deed that simply transfers the homes automatically upon death and only upon death. It provides the tax benefits of an inheritance, it can be revoked or changed at any time prior to death, and supersedes a will or trust provision.
Adam Martinez is the Chairman of the Real Estate Litigation Department at Rose Law Group pc. and can be reached at amartinez@roselawgroup.com
