One goal of estate planning is to help your assets, including your home, pass to your chosen beneficiaries quickly and with minimal expense. In real estate, a common strategy to avoid probate (the court process of validating a will and distributing assets) is to add others to the title.
This strategy involves adding the names of your children or other beneficiaries to the deed for your property. Often, the purpose is to take advantage of rights of survivorship: when you pass away, ownership of the property transfers to the surviving co-owner(s) by operation of law, potentially bypassing probate.
Many people attempt to execute this strategy themselves, believing they can simply download a deed form from the internet or obtain a template from a book, complete it, and record it with the appropriate authority. Writing your own property deed may seem simple, but even small errors can create serious legal issues. According to the
Understanding the Legal Terminology of Deeds A key reason DIY deeds fail is a misunderstanding of how various legal terms dictate property ownership. Simply adding a name to a deed is insufficient; the vesting (the legal status of the title) determines whether probate is avoided. There are various forms of joint ownership across states, and some are available only to married couples. Common types of joint ownership include the following: Tenants in Common If you simply add another person’s name to a property deed, the law often defaults to “tenants in common.” In this case, each owner generally holds a distinct, divisible share of the property. When one owner dies, their share does not automatically pass to the co-owner. Instead, the deceased owner’s share must go through probate to be distributed according to their will (or intestacy laws if there’s no will), which defeats the goal of avoiding probate. Joint Tenancy with Rights of Survivorship Joint tenancy with rights of survivorship is a common form of property ownership intended to avoid probate between non-spouses. When one owner dies, their share automatically passes to the surviving owner(s) without probate. However, depending on the state’s rules, the deed must include specific language to create a joint tenancy with rights of survivorship. A DIY mistake can render this intention void. Tenancy by the Entirety and Community Property with Rights of Survivorship Tenancy by the entirety and community property with rights of survivorship are forms of joint ownership available only to married couples and only in certain states. Similar to joint tenancy with rights of survivorship, each option provides automatic survivorship to the spouse upon the other’s death, potentially avoiding probate. Where available, tenancy by the entirety can offer protection against creditors, while community property can offer other benefits. California-Specific Considerations California is a community property state, which affects how married couples hold title to real estate. California recognizes several forms of ownership, including community property, community property with right of survivorship, joint tenancy, and tenancy in common. Each has different implications for probate, taxes, and creditor protection. What’s valid and advisable in California may differ significantly from other states, making it especially important to work with an attorney familiar with California real estate law when structuring property ownership. What Should You Consider? Although adding a co-owner to a property deed can help avoid probate, it’s often not the best strategy. It can expose the property to the co-owner’s creditors, who can come from many sources—for example, claims by a divorcing spouse or tax liabilities. In addition, adding a co-owner can have tax and other consequences you may not anticipate. Instead of a DIY deed, consider more robust, attorney-prepared solutions, such as properly prepared and implemented deed options or a revocable living trust. If you want your home or other real estate to pass to your children or other beneficiaries without the costly delay of probate, relying on a generic, fill-in-the-blank form carries significant risks. Deeds are state-specific legal documents with very particular requirements. A real estate deed that’s perfectly valid in one state may be completely invalid in another. Investing in professional preparation now can help avoid costly mistakes later and increase the likelihood that the deed will be legally valid and that your property will pass to your intended heirs. Book Your Introductory Meeting Today If you’re considering how to structure your real estate holdings to avoid probate, we can help you understand your options and potential risks. Meet with our team for 30 minutes to discuss your estate planning, trust administration, or probate needs. We’ll help you understand if we’re the right fit for your situation. Ready to get started? Call us at (650) 325-8276 or complete our online contact form to schedule your meeting.
