@Lonestar wrote:
If this is all true, maybe the biggest question not is, must the JT have lived in the property/home to make this a reality? Otherwise, what if it is undeveloped property that has no dwelling? (Because, this is a scenario we will have to work through in the future as well)
The following may not be what you have in mind for "futures" but I include it in case its helpful.
Adding names as joint tenants is often "the wrong way" to do estate planning. Elderly folks often do this to financial accounts or real estate either 1) to allow someone (child/friend) to help them pay bills or manage the asset or 2) to avoid probate or to easily have the asset go to a particular person when the older-person dies.
There are problems with this.
- was there a gift or not when the name was added? as you have seen that can be a problem and who needs uncertainty. was a gift tax return required? do you lose the I.R.C. 1014 step-up at death.
- the new joint owner may not have an asset that can be reached by his or her creditors. Grandma's money could be lost to pay kid's gambling debts or tort liability from a car accident or malpractice liability if a doctor, etc.
There are better ways
- use a power of attorney to allow the kid to manage the asset
- use a pay or transfer upon death title to be clear when ownership passes (not all states have that for real estate but many do, otherwise a simple trust could achieve the same results
Sometimes however, you do want to transfer ownership of a portion of the property. E.g. for medicaid planning. So it all depends.
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