Online resource center to help you explore these key issues, and others, regarding your estate.

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Mr. Miller has many years of experience in designing and implementing a comprehensive variety of Trusts, Wills, and other estate planning documents, as well as settling estates in the most expedient and appropriate method. Further, he counsels and assists clients on becoming eligible for VA benefits and Medi-Cal.

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Mr. Miller has been active in the area of VA Pension and Medi-Cal for well over a decade. He uses various specialized types of Trusts as well as non-trust strategies to gain eligibility for his clients and save the family money.

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Mr. Miller has been settling estates (both simple and complex) for well over 40 years. The starting point is always to create a strategy to settle the estate in the most efficient manner possible with a minimum of taxes. Often times the strategy created allows the family to bypass Probate Court proceedings.

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Did New Wife Pull a Fast One?

By merv,

  Filed under: Elder Law, Estate Planning, Probate & Estate Administration, Tax

Joint Tenancy Avoids Probate
Need for an Attorney
Whose Family Will Ultimately Get the House
Mortgage Liability
Capital Gain Disadvantage

Dear Mr. Miller:

Introduction:  My Dad has been living with a woman for a number of years.  He has owned his house long before he ever met her and that is where they have set up shop.  They just got married. 

So you’re wondering, “Where’s the problem?”  A very few months after the marriage I stumbled on some papers that indicated that title had been changed to joint tenancy between them.  Dad had promised that house to me when he died. 

I had a real estate friend of mine verify if this was true—and it was.  He said I should check with a lawyer to discuss the effect of all this.   What happens to my inheritance?

Worried Daughter!

Dear Worried:

Joint Tenancy Avoids Probate:  Joint tenancy title, an absolute favorite of so many, is an extremely dangerous form of title for those who don’t know what they are doing.  The reason is that it has so many ramifications.  Most people like it because it is an easy way for the family to avoid Probate when one dies. 

Need for an Attorney:  Everything may be on the up and up here.  A good heart to heart talk with your Dad is really what you need to do .  Did Dad and Wife consult an attorney before taking this action or was it just done by them directly?  If the latter, it is unlikely that Dad really thought through all of the below-the-surface ramifications. 

Whose Family Will Ultimately Get the House:  It may be that Dad does want Wife to inherit the house.  But did Dad really want Wife to get it all or just to be allowed to live in it for her remaining life so that you would inherit it after?  With the joint tenancy, if she outlives him, when she dies, the house will go to whomever is named in her Will or Trust, presumably her family member and not you. 

Debts:  And then there is the debts issue?  Does Wife have any?  Does she have any creditors?  This is very important because if she does, that house of your Dad’s can now end up as an asset available to a creditor of the Wife in a lawsuit. 

Mortgage Liability: Is there a mortgage on the house?  If so, did Wife assume the liability? In the unlikely event that the lender has to foreclose on the house and it does not sell for enough to pay off the debt, will Wife be liable along with your Dad for the remaining amount due–or will it just be your Dad?

Capital Gain Disadvantage:  If Wife dies first and Dad wants to sell the house, he could be staring at a significant capital gain tax. The IRS will forgive one-half of the pre-death appreciation, but not the other half.  Community property title would take care of both halves.  Of course, community property has all sorts of other ramifications, too.

Conclusion:  Depending on what your Dad actually wants to accomplish will determine what title or approach is the correct one.  And that is probably only going to be determined by a thorough discussion with a competent and experienced estate planning  attorney.  Maybe a Living Trust would be an appropriate approach, maybe not. 

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About Living Trusts

About Living Trusts is hosted by the Law Offices of Merwyn J. Miller, as your online resource center to help you explore these key issues, and others, regarding your estate.

Merwyn J. Miller, J.D.

  • Board Certified Specialist in Estate Planning, Trust & Probate Law
  • Co-Author of legal text book and of “Don’t Go Broke in a Nursing Home
  • Teacher of law courses at public and private colleges
  • Continuing Education Instructor for attorneys
  • Columnist for largest regional newspaper in San Diego County and professional journals for 15 years, Contributing author to the book “In Your Service: The Veteran’s Friend”
  • Masters Degree in Financial Services - Estate Planning

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