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 Can Create a Capital Gains Problem
This is the problem that surprises Atlanta families the most. Adding a child to your deed can leave them with a capital gains tax bill. Whether it does depends on how the deed is written and what happens before you die.
A share of a home given away during life keeps the giver’s old purchase price as its cost basis. A home that passes at death gets a step-up in basis. The value resets to what the home is worth on the day you die.
If your deed is a survivorship deed, you paid for the home, and you die first, federal law counts the whole home in your estate. The whole home gets the step-up. Your child should keep proof that you paid for the home.
That result can be lost. If the deed leaves out Georgia’s survivorship wording, only your half is sure to get the step-up, and your child’s half can keep your old purchase price. The same can happen if the joint tenancy is ended before you die. If you keep living in the home after you give a share away, the tax result can be different, so get advice before you count on either outcome. Atlanta home values have grown a lot, so a lost step-up can mean tens of thousands of dollars in 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. This is worth knowing before the deed is signed, not after, whether you are adding a spouse to a Georgia deed or anyone else. You also cannot refinance or sell the home without their signature. 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: Medicaid Can Look Back at the Gift for Five Years
Adding anyone but your spouse to your deed counts as a gift under federal Medicaid rules. Georgia can penalize that gift. This happens if you apply for Medicaid long-term care within 60 months, under the look-back rules in 42 U.S.C. § 1396p(c). Georgia nursing homes cost over $105,000 a year on average for private pay. A penalty at the wrong time can hurt a family counting on Medicaid planning to help pay 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. Do not panic. Review your deed with an attorney. Move the property into a better tool before a death, sale, or Medicaid application forces the issue. The sooner you act, the more options you have. To move the whole property, every owner has to sign. How you undo a joint tenancy changes the tax and Medicaid results, so get advice before anyone signs. If a co-owner will not cooperate, Georgia still gives you three ways out of a shared deed, including a partition case in superior court. Some families choose an irrevocable trust for extra protection. For most Atlanta homeowners, a revocable trust solves the 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. No one else holds legal title, so a co-owner’s creditors cannot touch it. You can change the plan any time. No one else’s signature is needed. A revocable trust does not protect your home from Medicaid on its own. It avoids the gift problem because you never add anyone to your deed. At death, your assets still get the same step-up in basis that a direct inheritance would get.
Atlanta Estate Planning builds and funds revocable trusts for Georgia families for a flat $3,500 fee. You know the full cost before you start. This trust is part of our full estate planning service for Georgia families.
If your only concern is a will that needs a small update, like a beneficiary or an executor, you may not need a trust at all. See how to amend a will in Georgia with a codicil for the exact signing steps.
