Doesn’t joint ownership avoid probate?

Really, it just postpones it. When one joint owner dies, ownership will transfer to the other without probate as long as the joint ownership was a survivorship-type ownership. But when the second owner dies, or if both should die at the same time, the assets must then be probated before distribution.

And, the risks of adding someone other than your spouse as a joint owner of your assets are serious. You lose control when you do this. What if your new joint owner becomes involved in a lawsuit due to an auto accident, divorce, business or creditor problem. You could end up losing the equity in your asset.

Plus, possible gift tax issues become a concern. For example, when you make one of your children a joint owner of your home, the IRS considers that a gift of half the home for gift tax purposes.

The only thing worse than making someone other than your spouse the joint owner of any of your assets, such as your home, is putting the whole thing into their name. The IRS considers this a gift of the entire value of the asset for gift tax calculations, and it exposes the entire asset to the possible legal and creditor problems of the other person.

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