Entering those troublesome 60's, and reading lots of warnings about tax ramifications concerning property. I have one son. My husband (2nd) and I own 3 pieces of property, 2 houses. I am considering adding my sons name to the deeds of the property along with our names, also joint tenant all survivor rights. This is Michigan, there are no mortgages, liens or taxes owed on any of the property. This would, of course, be with my husband remaining on the deeds and with his knowledge and agreement. The hope is to do this now, allowing our future possible medical needs to be handled without including turning our property over to the state once we're gone AND to allow my son to take ownership without probate and tax consequences when the time comes. Am I over-simplifying? This is exactly what we did with my parents home - I was on the deed (and mortgage) and the property passed to me.

The problem with this is that, by putting your son on the deeds you are giving him a part ownership in the properties. If he does not give you fair market value for that part interest, then the IRS would consider it a gift and there may be tax consequences.

I would suggest sitting down with an competent estate planner to figure out the best way to do this.

I'm not sure what you mean by this part:

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Originally Posted by jackie-in-flatrock

The hope is to do this now, allowing our future possible medical needs to be handled without including turning our property over to the state once we're gone

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Putting your son on the deed as joint tenant with rights of survivorship will indeeed simplify the probate process for him, but although you indicate that doing this will avoid "tax consequences when the time comes," it really doesn't, because you are effectively replacing future estate taxes that may be due when you pass on with a combination of gift and estate taxes that add up to the same amount. This is considered a gift to him and hence you should file a gift tax return (Form 709). Most likely no gift taxes are actually due but it may have implications on your estate planning. All of this is really only an issue if the value of your estate is greater than $3 million - and if that's the case I suggest that you meet with someone who specializes in estate planning to make sure you're doing the right thing.

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Originally Posted by ebaines

I'm not sure what you mean by this part:



Putting your son on the deed as joint tenant with rights of survivorship will indeeed simplify the probate process for him, but although you indicate that doing this will avoid "tax consequences when the time comes," it really doesn't, because you are effectively replacing future estate taxes that may be due when you pass on with a combination of gift and estate taxes that add up to the same amount. This is considered a gift to him and hence you should file a gift tax return (Form 709). Most likely no gift taxes are actually due but it may have implications on your estate planning. All of this is really only an issue if the value of your estate is greater than $3 million - and if that's the case I suggest that you meet with someone who specializes in estate planning to make sure you're doing the right thing.

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Exactly!

Assuming the property is valuable enough to trigger tax implications, not consulting an estate planning professional is a classic case of "penny wise and pound foolish".

"turning our property over to the state once we're gone" is not how it happens. Worse-case scenario would be probate. That does not entail "turning ... property over to the state" . It means a relatively more complex (doing the court-required paperwork, or hiring an attorney to do it) and therefore expensive way of someone wrapping up your things after death. Your heirs still ultimately get your stuff.