It happens almost automatically. A couple buys a home and puts both names on the deed as joint tenants. A parent adds an adult child to the title so things will be simple later. A widow adds a niece to her checking account for convenience. Joint tenancy is so common that many people cannot name another way to hold property.
Here is the problem. Joint tenancy offers some short term convenience, but in the long run it creates a list of legal and tax problems that can cost you and your family many times the expense you thought you were avoiding. It is often called the poor man's will, and like most shortcuts in estate planning, you get exactly what you pay for.
Why people choose joint tenancy
Joint tenancy with right of survivorship has one appealing feature. When one owner dies, full ownership passes immediately to the surviving owner by operation of law. No court, no will, no probate. That part is true, and it is why so many families rely on it.
What that sales pitch leaves out is everything that comes after.
Probate is postponed, not avoided
Joint tenancy avoids probate at the first death only. When the surviving owner dies, the entire estate goes through probate, the same costly, slow, and public court process the family thought they had escaped. In California that process regularly takes a year or more and consumes a meaningful share of the estate in statutory fees. The bill simply arrives a generation later, and it arrives larger.
There is a second cost that is easy to miss. The first owner to die loses all control over where the property ultimately goes. The survivor owns everything outright and can leave it to a new spouse, a new family, or anyone else. Children from a first marriage are a common casualty of this arrangement.
Your property is exposed to the other owner's problems
When you hold property in joint tenancy, you effectively give up control of half of it. Whether the other owner is your spouse, your child, or a friend, your share of the asset is now tied to their life. Half of your property could be reached through:
- The other owner's debts, back taxes, or bankruptcy
- The other owner's divorce
- Lawsuits or judgments against the other owner
Day to day control suffers too. You may need the other owner's consent, and sometimes their spouse's consent, before you can sell or refinance. If the other owner becomes incapacitated, your property can get tangled in their conservatorship. If the other owner is a child, their financial inexperience becomes your financial risk, and cash accounts can be emptied with no safeguard at all.
The tax surprises
Gift taxes when you add a name
When you add anyone other than your spouse to the title of real property, the IRS treats it as a gift of part of the property, and it generally must be reported on a gift tax return. A father who adds his son to the deed of his home has made a gift of half the home's value in the eyes of the government. Amounts above the annual gift tax exclusion, currently $19,000 per recipient, reduce your lifetime exclusion and create paperwork most families never see coming.
A lost step up in basis
California is a community property state, and that matters here. When property passes at death, heirs normally receive a step up in basis, meaning the property's cost basis resets to its market value and the built in capital gain disappears. Spouses who hold property as community property get a full step up on the entire property at the first death. Spouses who hold the same property in joint tenancy get the step up on only half. For a Los Angeles home bought decades ago, that difference can mean capital gains tax on hundreds of thousands of dollars of appreciation when the survivor sells.
Adding a child to a deed during your lifetime is even worse. The child receives your original cost basis on the gifted share instead of a step up at your death, and the transfer can also raise property tax reassessment questions under Proposition 19.
Estate taxes
The federal estate tax exclusion is $15 million per person as of 2026, so most families will not owe federal estate tax. But joint tenancy can still waste planning opportunities between spouses, and the exclusion amount has changed repeatedly over the years. A plan that depends on Congress never changing the number is not a plan.
The alternatives
You can hold property in your own name, as tenants in common, or as community property with right of survivorship, which for married California couples combines probate avoidance at the first death with the full step up in basis. Each option solves part of the problem.
But none of them replaces thoughtful estate planning. Everything joint tenancy promises, and everything it fails to deliver, is handled properly by a revocable living trust. With a living trust you can:
- Avoid probate at every death, not just the first one
- Control exactly who receives your estate, when, and how
- Protect children from a prior marriage or children with special needs
- Keep your affairs private and out of the public court record
- Keep your assets out of reach of your heirs' creditors and predators
- Retain complete control of your assets while you live
- Provide for your own care if illness or injury leaves you unable to manage things yourself
Before you add a name to a deed, talk to us
Adding a loved one to a title takes 10 minutes and can create problems that take years and real money to undo. If your home or accounts are held in joint tenancy, or you are considering it, a short conversation now can save your family probate, taxes, and conflict later.
This article is for informational purposes only and does not constitute legal advice. Every family's circumstances are unique. Contact MVP Law Group for a consultation tailored to your situation.