January 12, 2009

I’ll put my kids on the title

By Robert P. Bergman
Special to the Times

John and Louise bought their home in 1965. They took title in “joint tenancy” because that’s what the deed had printed on it. John and Louise had two children David and Mary.

In 1990, John suffered a heart attack and died. Louise found out that the joint tenancy title meant she now owned the house. She went to a local title company and had them do the paperwork to put the property into her name.

Louise had heard about living trusts and how they could avoid probate, but she didn’t want to be bothered with the time and expense of seeing a lawyer to help her prepare an estate plan. She figured that the joint tenancy ownership she had with John worked pretty well, so she decided to go ahead and put her children on the title of her home as “joint tenants” with her. After all, her children were going to outlive her anyway, right? This way, when she died, all they would have to do was go to a title company like she did, and the property would belong to them. Best of all, there were no lawyers involved!

In 1994, her son David separated from his wife and moved back into Louise’s home. Louise was happy at first to have her son back home. David was handy, and at first he helped out by fixing things and paying for a share of the electric, water and food bills. But then, after a few months, David quit his job, started drinking heavily and then sat around the house all day.

After several months of dealing with this, Louise had enough. “David, you need to move out and make your own way. I can’t support you like this anymore.”

“But I have nowhere else to live,” said David, “Don’t you love me?” Even Mary couldn’t get her brother to leave.

Louise didn’t know that to do. David was not a violent person. He had never threatened her at all. He was just unwilling to leave!

A friend told Louise she could probably get David out of her house very quickly with the help of a lawyer. So she went to a lawyer that specialized in evictions. He told her, “Sure, we can get your son out. It shouldn’t be a big problem.”

In fact, the lawyer felt that way until he found out that David was on the title to Louise’s home. At that point, he informed Louise that David’s name on the title meant that David was an owner of the home. As an owner, he had a legal right to live in the home even if Louise wanted him to leave! She could not get him to leave. Louise had never imagined that she would be in a situation like this. However, the worst was yet to come.

David had not filed his taxes for several three years, and, unknown to Louise, he now had tax liens for over $100,000 again him. The IRS filed papers to enforce David’s tax lien, and they went after his one-third interest ownership interest in Louise’s home. To save her home from being sold by the IRS to pay David’s back taxes, Louise had to use her savings to pay off the IRS and redeem her home.

Louise’s “easy” solution to avoid probate and pass her home on to her children cost her savings, quiet enjoyment of her own home and, ultimately, her relationship with both of her children. If only Louise had seen a lawyer. With proper estate planning, she could have avoided all of the serious problems she experienced.


Robert P. Bergman is a San Jose estate planning attorney and counselor who devotes his law practice exclusively to assisting individuals and couples plan for incapacity and the eventual transfer of their property to their heirs. Bob specializes in working with parents who have minor children. Bob gives a regular monthly seminar at the Jewish Community Center in Los Gatos entitled “Everything You Wanted To Know About Estate Planning, But Were Afraid to Ask!” Visit his Web site at www.lawbob.com where you can learn more, get on his mailing list, register for an upcoming seminar, schedule a consultation, and read other articles on estate planning topics that Bob has written. You can also reach him by e-mail at rpb@lawbob.com or telephone at (408) 247-0444. All inquiries are confidential. This column is intended to provide general information about estate planning ideas, concepts, and laws, and is not to be relied upon as rendering legal advice about your particular situation. No attorney-client relationship is created by these articles. The laws concerning estate planning, wills, trusts, and estate taxes are very complex, often state-specific, and change on a regular basis. Consult with an experienced attorney before taking any action that would affect your personal or business matters.