Should you put your home into joint tenancy?

Dear Len & Rosie,

I am looking for a form to create a joint tenancy. I wish to transfer my home to joint tenancy between me and my mother. I want to avoid probate if I should pass away.  I am 34, and my mother is in her 60’s.

Josh

Dear Josh,

There are a number of places where you can find blank deed forms to put your home into joint tenancy with your mother. Many office supply and stationary stores have such forms. You can also find deed forms on the internet. If you find a form, make sure that the form you buy or download is specific to California. Each state has its own requirements concerning the preparation and recording of deeds, and a form specific to, say, Maryland, full of hoary language such as “whereas and wherefor” and “the party of the second part,” isn’t going to do you much good.

But finding a good form is only part of the struggle. You have to fill out a Preliminary Change of Ownership Report and submit it to the County Recorder with your deed so that the County Assessor can confirm that the transfer will not result in a property tax reassessment under Proposition 13 (It won’t, but they need the form anyway). And every county has its own rules and procedures related to Documentary Transfer Tax.

What it all comes down to is that you’re better off not doing this yourself, but if you’re willing to invest in the learning process, you can figure it out.

But do you really want to do this at all? We think it’s a bad idea. It’s one thing if your mother is buying the home with you. Then it’s only fair that her interests be protected by her being on title. But if you put the home into joint tenancy and change your mind later, your mother may refuse to sign the property back over to you. Or she could even be incapacitated and incapable of doing so. Or she may give her half of the home to someone else.

There are two better alternatives. You could create a revocable trust that leaves the home to your mother or to someone else you specify if she passes away before you, which is fairly likely. A less expensive alternative would be for you to prepare and record a Revocable Transfer on Deed (TOD) Deed.  Forms for this are available on line, or you could even look up California Probate Code section 5642 and type it up yourself.  The advantage of a TOD deed is that your mother wouldn’t own an interest in your home until your death, and you can borrow against the home, sell it, or leave it to someone else without your mother’s signature or consent.

Len & Rosie

Does my wife’s mother have a right to remain living in the home even though she was never added to the title?

Dear Len & Rosie,

My mother-in-law is 85 and is married to a man who is almost 90 years old. My wife is concerned that should her mother’s husband die before her mother, his family will want her to vacate the home in which she has lived with her husband for the past twenty-five years.

My wife’s step-father was previously married and was already a widower when he married my wife’s mother twenty-five years ago. Their residence was his own property from before the marriage.

Does my wife’s mother have a right to remain living in the home even though she was never added to the title? Does she have a right to any equity that has accrued in that property during their marriage?

John

Dear John,

Things are not looking so good for your mother-in-law. Everything her husband owned prior to their marriage is his separate property. He has the right to leave his separate property to anyone he wants, together with his half of the community property. If his home was already bought and paid for prior to the marriage twenty-five years ago, the home remains his and your mother-in-law won’t have any right to it if he doesn’t leave her in his will or trust.

If, however, there was a loan against the property when they got married, and they’ve been paying off the loan with their employment income, then a portion of the property will be community property, half owned by your mother-in-law, regardless of who is named on the deed. The amount of this interest is roughly based on the portion of the property actually purchased with community property. However, that won’t give your mother-in-law all of the property or a right to live there until her death.

Your mother-in-law’s concerns can be addressed by estate planning. Her husband and his heirs have a reasonable interest in protecting their family’s property, but it is unlikely that the husband will want his wife of twenty-five years tossed out on the street upon his death. He can, and should, update his will or trust to provide his wife with a right to reside in the property until her death. This way, she can be guaranteed a residence and her husband’s children can be guaranteed their inheritance.

Len & Rosie