Highlighting Some Risks Of Joint Ownership In Florida Estate Planning
Florida’s probate process is infamous for a reason. The time cost, public record, and expense that inherently come with the process make it a no-brainer for many savvy Floridians to utilize estate planning tools in order to minimize the amount of probate the estate will have to go through.
One popular option is to utilize joint ownership of assets. Having more than one person own an asset can help avoid the public probate process, since upon the death of one of the owners the asset would still have a living owner to pass to. However, there are definitely risks in this estate-planning strategy that you should be aware of prior to incorporating it into your own estate plan.
- Potential Creditor Problems
If one of the joint owners has issues with credit, your asset could be at stake. A creditor of one joint owner can garnish funds they are owed from a checking account that the debtor owns, even if that debtor does not really deposit money in the account. For example, if a parent adds an adult child to the title of their bank account, or the title on their home, if a debt collection is taken against their child then the creditor bringing the action could potentially access that account or the equity in the mortgage as they move to collect against your child.
By this same logic, your account or property can also be brought into your child’s divorce proceeding or bankruptcy proceeding. Keep in mind that matters like divorce are sometimes entirely outside of your child/the other joint holder’s control. It is not a matter of questioning a person’s character, it is just a reality that sometimes unexpected things happen in life, and there is a certain level of risk involved in listing someone as a joint owner on an account or asset
- Florida Ad Valorem Property Taxes
You should keep in mind that adding someone as a joint-owner of a Florida home may end up disqualifying you from the Amendment 10 cap, which can work to minimize annual increases assessed to your property tax. This “cap” can result in thousands of dollars of savings per year, so you should ensure you understand how your property and taxes would be affected from listing the joint-owner.
- Be Aware of a Loss of Control
You should consider that by making someone a joint-owner of an asset, you are giving them legal rights to the asset/funds/property. You may have worked for the asset, put all of the “sweat equity” into obtaining the asset, but at the end of the day, by making someone a joint owner you are entrusting them with very real legal rights to the asset. You will need to work with that person in the future on certain decisions such as agreeing to sell, remortgage, or refinance assets.
Contact Suncoast Civil Law
You have worked your whole life to establish your estate. You deserve to have competent, experienced legal counsel with you as you manage that estate moving forward. Contact our Sarasota probate litigation attorneys today to discuss how our team can work for you.