Problem 1: Joint Tenancy Only Avoids Probate Once
When one owner dies, the property goes straight to the other owner. No probate needed. That part works well. But it only works once. When the second owner dies, there is no one left to inherit automatically. The house must now go through Georgia probate, the survivorship path created under a joint tenancy with right of survivorship deed only covers the first death.
For a married couple with no one else on the deed, probate does not go away. It just happens one generation later.
Problem 2: Your Joint Tenant’s Creditors Can Reach the Property
Adding someone to your deed gives them real ownership. It is not just a promise for later. This means their creditors, a lawsuit against them, or even a divorce can reach their share of your property. Say you add your adult child to the deed. If they get sued or divorced later, your home can get pulled into that fight, even though you did nothing wrong.
Problem 3: Adding a Child Creates a Capital Gains Problem
This is the problem that surprises Atlanta families the most. When you add a child to your deed while you are alive, they get your original purchase price as their cost basis, not the home’s current value. If they sell the home later, they pay capital gains tax on every dollar the home has gained since you bought it.
Compare that to inheriting the home after you die instead. Assets you inherit get a step-up in basis, meaning the value resets to what the home is worth on the day you die. A child who inherits pays tax only on gains after that point. Atlanta home values have grown a lot, so this difference can mean tens of thousands of dollars in avoidable tax.
Problem 4: You Cannot Change the Plan Without Their Signature
Once someone is a joint tenant, you cannot remove them from the deed on your own. You cannot refinance or sell the home without their signature either, and your plan now depends on them saying yes, even if your relationship changes. A falling-out, a move out of state, or a disagreement about the house can leave you stuck.
Problem 5: It Triggers the Medicaid Look-Back Period
Adding someone to your deed counts as a gift under federal Medicaid rules. If you apply for Medicaid long-term care within 60 months of that gift, Georgia can penalize you for it under the look-back rules in 42 U.S.C. § 1396p(c). Georgia’s average nursing home costs over $105,000 a year for private pay, so a Medicaid penalty at the wrong time can be serious for a family counting on Medicaid planning to help cover that cost.
What to Do If You Already Own Property in Joint Tenancy
None of this means you did something wrong. Joint tenancy was a reasonable choice at the time. The fix is not to panic, it is to review your deed with an attorney and move the property into a better tool before a death, sale, or Medicaid application forces the issue. The sooner you do this, the more options you have. Some families compare this to an irrevocable trust for extra asset protection, but for most Atlanta homeowners a revocable trust solves the joint tenancy problem without giving up control. Setting up a trust in Georgia is easier than most people expect.
The Alternative That Solves All Five Problems
A properly funded revocable living trust avoids all five of these problems at once. Property in a trust skips probate at every death, not just the first one. It is not exposed to a co-owner’s creditors, because no one else holds legal title. You can change the plan any time, with no one else’s signature needed. And because the trust stays in your control while you are alive, your assets still get the same step-up in basis at death that a direct inheritance would get.
Atlanta Estate Planning builds and funds revocable trusts for Georgia families for a flat $3,500 fee, so you know the full cost before you start. This is part of our full estate planning process for Georgia families.
