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What if Jim never establishes a revocable trust? Could he get by with joint tenancy? If Jim were married, he could avoid probate at the death of the first spouse by owning his real property as in joint tenancy with his spouse. Joint tenancy means that two (or more) people own property in equal shares. On the death of either person, the entire interest automatically passes to the remaining owner, and probate is avoided. Of course, on the death of Jim’s spouse [link widoczny dla zalogowanych], the real estate would still be subject to probate. In addition, titling property in joint tenancy without consideration of whether the property is separate or community may result in unintended tax consequences (see below). Also, Jim might benefit from some estate tax planning, which may be better facilitated when planning with trusts. Ultimately, ownership of the property in a funded revocable trust while giving full consideration to the real estate’s community property status and estate tax issues will give Jim the best protection.
Second Pitfall: Listing your Child on the Deed
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First Pitfall: Failure to plan for Probate
The way homebuyers title real estate determines whether a probate will occur. You might ask, what is Probate and why should I be concerned about it? When people talk about Probate, they are referring to the court-supervised administration of estates. Under California Probate Code §§10800 and 10810, probate fees for the each of the attorney and personal representative are 4 percent on the first $100,000, 3 percent on the next $100,000, 2 percent on the next $800,000, and so on. These fees are calculated on the gross (not the net) value of the estate.
For instance, let’s say that Jim, who is not married, dies owning one asset, a house worth $1,000,000 with a mortgage of $500,000. Jim’s house is titled in his name alone. Jim’s will leaves the house to his three children, one of which is named as personal representative. The probate fees here would be as follows: $23,000 to Jim’s attorney (plus any “extraordinary fees”) and $23,000 to the personal representative (if he/she decides to take a fee). The minimum fee for this probate is $23,000, however it could easily rise to $46,000 or more. As noted above, these fees are calculated without taking into account the $500,000 mortgage, because the fees are charged on the gross (not the net) value of the estate. As you can see, Jim’s estate does not have enough liquid assets to cover the expense of the probate!
The myriad options presented to homebuyers when titling real estate have significant tax, asset protection, and estate planning consequences. Failing to consider these issues often results in unanticipated taxes, liability, fees, and headaches. This article discusses a variety of potential pitfalls that should be considered when purchasing or re-titling property.

First, owning a home in joint tenancy exposes t

How can Jim avoid probate fees? First, he could establish a revocable trust and transfer the property to himself as trustee. In that case, the asset would not have to pass through a probate procedure, because it would be transferred directly by a successor trustee. However, Jim needs to make sure that his trust is fully “funded” at the time of his death. Otherwise, a probate might still be required. Often, trust documents appear to be valid on their face, but the underlying assets have not been funded to the trust. Jim should seek an attorney’s counsel in order to ensure that his trust is funded and remains that way.
What if Jim owns his property jointly with one of his children? The idea of listing a child on a deed as a joint tenant often appeals to parents. This approach appears to offer a simple, cheap way to transfer property on death, avoid probate, and perhaps even avoid taxes. However, adding a child to the title of your house could result in disastrous consequences, both during life and at death. At the end of the day, it is rarely advisable to take this “shortcut.”