I am asked about adding someone to the title of their property (i.e., Deed) nearly every day. The assumption is that if an heir is already on the title at the time of your death, then they may be able to avoid probate entirely and save money. While the procedure for doing this is straightforward, the consequences that each party assumes are often unintended and severe. Do your research first!
To explain a little about the process, probate is the necessary procedure for administering the estate of a deceased person. During probate, the heirs or family members of the deceased person will present information regarding the estate (i.e., Was there a Will? What assets were owned? Who are the heirs? etc.) and all potential heirs sign the application. If one was not already identified in the will, they will also request that an executor or administrator be appointed to oversee the affairs of the estate. The judge will then review this information and make a ruling, oftentimes within one or two months.
Put bluntly, this is not a difficult burden to satisfy and is already required for every estate.
So why does this come up so much? In most cases, the person asking recently experienced probate with another family member and hope to simplify this for their own heirs. Their focus is on Georgia Statute O.C.G.A. 44-6-190 – Joint Tenancy with Survivorship.
In Georgia, parties can hold title jointly one of two ways – Tenants in Common (TIC) and Joint Tenancy with Right of Survivorship (JTWROS). Upon your death, property owned TIC goes into your estate, while property owned JTWROS would transfer to the surviving property owner – this avoids probate altogether! Faced with the option of avoiding probate, you can see why many people are interested in this option for their own family. Basically, all you have to do is call an attorney and pay a small fee, and now they don’t have to worry about probate.
But wait, there’s more!
As mentioned above and as I explain below, though the process is simple but the consequences can be severe as I explain below.
As an example, a generous grandfather started planning his estate and decided to put his grandchildren on the titles of more than 20 properties that he had accumulated over his lifetime. Upon his death, his grandchildren (and their accountants) realized that their cost basis was not the current market value (i.e., stepped up cost basis), but instead what he paid for each property originally. In this example, the grandfather’s cost basis for all the properties was just over $100,000, while the properties were worth over $1M at his death. Though they didn’t have to wait for probate before selling, I assure you they would have all happily waited to avoid having nearly $900,000 in taxable gain!
So, when does it make sense to add someone to your title to help avoid the possibility of probate? I would consider this a good idea for:
Christian Ross, Esq. | Campbell & Brannon, LLC | 770.321.0222 | email@example.com
Christian Ross is an Attorney licensed in both Georgia and Florida and specializes in both residential and commercial real estate. With his original goal of community involvement and education, Christian remains incredibly passionate about teaching. He frequently shares his lectures on both video and audio platforms and has a library of videos and podcasts available for free on YouTube, and on the Campbell & Brannon website. A frequent guest speaker at large forums, Christian has been a guest with the Atlanta Realtors Association, Cobb Association of Realtors, The Southeast Residential Real Estate Trade Show and at the Atlanta Economic Summit.