Things to Consider Before Jointly Owning Property

Whenever you purchase a property, it’s extremely important that you 
understand your deed and title.

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Today, I would like to share some important information about taking title and owning property with another person.

Let’s imagine you and your spouse are buying a property together. Typically in our area, most married couples will seek deeds where they are “tenants in common.” But, there is another way for people to own property together. This alternative is called joint tenancy.

Let’s say that your mom owns a property and she decides to place you as a joint tenant on that property. This example is a perfect illustration of joint tenancy.

Before purchasing a property, make sure you understand what kind of deed you’re getting and how you’re taking title.

There can be benefits associated with owning property together in this way, but there can also be some pitfalls to watch out for. Adding someone to the deed on the property means the original owner has lost some control. If you bring someone onto the title of your property with you, your asset could be at risk if this new person on the deed runs into financial trouble.

Another consideration is whether the person you’re adding to your deed is going through a divorce. If they are, your property could now be at risk due to the divorce proceedings.

Also, if the reason you’re adding someone to a deed is to eventually gift them the property, you must be aware of the tax implications that come along with this. When you gift something by taking ownership, this is a taxable event. And as I understand it, there is a value limit of $14,000 per year on gifts you give to your children, specifically. So if you gift your child a home through joint tenancy and the half of the property’s value exceeds $14,000, you have created a taxable event. 
 
So, the bottom line is this: Before purchasing a property, make sure you understand what kind of deed you’re getting and how you’re taking title.

If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.