As a Florida estate planning attorney with a real estate attorney background, frequently I’m asked to change the ownership of real estate from an individual, or a married couple, to a joint ownership with “rights of survivorship” (“JTWRS”). Virtually every time the request is made, it is by a parent(s) to add their child(ren) or sometimes their grandchild(ren) as co-owners of their Florida Homestead. Parents view the change of ownership as a quick and easy way of avoiding probate.
Oh, if that was all there was to it. As Paul Harvey was famous for saying:
“…. and now, the rest of the story.”
There are six reasons that may give an owner of a house in Florida or other type of Florida real estate pause for concern to create a JTWRS. This article addresses three of the reasons. The next article will address the other reasons. The reasons are not intended to be an exhaustive list of the concerns an owner should weigh before changing their individual ownership of their Florida real estate to a JTWRS. Any one of the concerns mentioned below and in next week’s article may be reason enough not to change the real estate to a JTWRS.
- Incapacity Or Unwillingness - If the original owner decides to sell the Florida property after the JTWRS is established, the original owner must receive the cooperation of all of the owners, including signing documents such as a deed. What if the other owner(s) does not want to sell “their” interest in the Florida house or the other owner(s) is incapacitated, meaning the person is mentally unable to sign a deed to transfer ownership? What then? You may not be able to do anything. A guardianship may be established for the incapacitated co-owner of the Florida home, but that takes time and money and the guardian may not agree to the sale or approve that all of the net proceeds of sale be distributed to the original owner.
- Credit Issues Or Bankruptcy - After the ownership of the Florida home is changed to a JTWRS, the original owner may find it challenging to refinance the Florida realty due to credit issues of the additional owner or the new owner’s lack of timely cooperation with the lender.
- Divorce - If the additional owner of the Florida property becomes involved in a divorce, the refinance or sale may be delayed or lost entirely. If the original owner cannot afford to wait until the divorce is final, the original owner may have to petition the court to exclude the Florida home from the marital estate.
(Continued the week of June 12, 2012)