Problem 1 — Joint Tenancy Must Be Expressly Created, and Most People Get It Wrong
Georgia does not default to joint tenancy. Under O.C.G.A. § 44-6-190, any deed naming two or more persons is presumed to create a tenancy in common under O.C.G.A. § 44-6-120, unless the instrument expressly uses language such as “joint tenants with right of survivorship” or “joint tenants and not as tenants in common.”
A deed that says “to John Smith and Mary Smith” creates a tenancy in common, not a joint tenancy. There is no automatic right of survivorship. Many Georgia investors who believe they created a joint tenancy did not. They added a name to the deed without using the required survivorship language. When they die, the property goes through probate, defeating the entire purpose.
Even for investors who do get the language right: a joint tenancy can be severed, which turns it back into a tenancy in common, by any single joint tenant acting alone, without the other’s knowledge or consent. The survivorship benefit can disappear without warning.
Problem 2 — It Only Avoids Probate Once
Joint tenancy with right of survivorship bypasses probate at the first owner’s death. The surviving joint tenant takes full ownership automatically, by operation of law, at the moment of death. No court, no petition, no waiting period.
That is the full extent of what joint tenancy does.
When the surviving owner later dies, they hold the property as an individual. The survivorship mechanism is gone. It was used up at the first death. The property passes through their estate and goes through probate, subject to the full timeline (13 months on average for a simple Georgia estate), attorney fees, executor commissions under O.C.G.A. § 53-6-60, and court supervision.
For a Georgia investor who adds a child as joint tenant to avoid probate, the outcome is: probate skipped at the investor’s death, probate required at the child’s death, unless the child has done separate estate planning. Joint tenancy transfers the probate problem to the next generation. It does not eliminate it. For what probate actually costs when it runs on a rental property estate, see How Much Does Probate Cost for Georgia Rental Properties.
Problem 3 — One Incapacitated Owner Blocks Every Transaction
Every conveyance of Georgia real property requires the signature of every owner. In a joint tenancy, both joint tenants must sign to sell, refinance, or encumber the property. If one joint tenant is incapacitated by a stroke, dementia, or an accident and cannot sign, the other joint tenant cannot proceed with any transaction without court authorization.
Without a durable power of attorney that the title company and lender will accept, or a properly established conservatorship, the property is frozen. The investor who added a spouse or child as a joint tenant for simplicity has created a structure where one health event locks the entire asset.
A revocable trust solves this directly: the successor trustee steps in immediately upon incapacity, with no court involvement, and can execute any transaction the trust authorizes.
Problem 4 — A Co-Owner’s Creditors Can Reach the Property
When one joint tenant has a judgment against them, a creditor can record a Writ of Fieri Facias (FiFa) with the superior court clerk in the county where the property is located under O.C.G.A. § 9-12-86(b). That recording attaches the lien to the debtor’s interest in the property.
The creditor can then sever the joint tenancy and pursue a forced sale through the partition process under O.C.G.A. § 44-6-160. The other joint tenant’s interest goes to auction to satisfy a debt they did not incur. The co-owner does not need to have done anything wrong. The liability belongs to the debtor joint tenant alone, but the property is not protected.
Trust beneficiaries hold equitable interests, not legal title. A creditor of a trust beneficiary cannot attach a lien to trust property or force a sale of trust assets to satisfy that beneficiary’s personal debts.
Problem 5 — Adding a Child as Joint Tenant Is a Gift You Must Report, With an Uncertain Tax Basis
When an investor adds an adult child as a joint tenant on a rental property deed, they are making a gift of a fractional interest in the property. Under IRC § 2511, that gift is subject to federal gift tax rules. For a rental property worth $500,000 with no mortgage, adding a child as a 50% joint tenant is a $250,000 gift, far above the annual exclusion, requiring Form 709 filing. Most investors owe no gift tax, because the gift only counts against a lifetime limit.
The tax basis is where this gets risky. Under IRC § 1014, property counted in a person’s estate at death gets a stepped-up basis. The heir’s basis resets to fair market value at the date of death. Under IRC § 1015, property received as a gift keeps the giver’s original cost basis.
A child added as a joint tenant sits between those two rules. When the investor paid for the property, the joint tenancy is still in place, and the investor dies first, IRC § 2040(a) counts the whole property in the investor’s estate. The whole property then gets a stepped-up basis, reduced by any depreciation the child already claimed.
That outcome can be lost. If the joint tenancy ends before the investor dies, the child’s gifted share can keep the investor’s original basis under § 1015. If the deed leaves out Georgia’s survivorship wording, the owners are tenants in common, and only the investor’s half is stepped up. Money the child put into the property, which can include the child’s share of rent used for improvements or the loan, may not get a new basis. The child also has to be able to show the investor paid for the property. If the investor keeps all the rent after giving a share away, the tax result can be different, so get advice before counting on either outcome.
An investor who holds the property in a revocable trust and leaves it to the child at death gets a stepped-up basis on the whole property under § 1014. There is no gift to report, and nothing depends on a deed staying in place.
What a Trust Does Instead
A revocable living trust eliminates all five problems.
Probate: The trust holds title indefinitely. At the investor’s death, the successor trustee takes over, with no probate at the first death, no probate at the second, and no probate at any generational transfer.
Incapacity: The successor trustee takes over immediately upon incapacity. No conservatorship. No court. No frozen transactions.
Creditor protection: Trust property is not reachable by a beneficiary’s personal creditors. The legal separation between the trust and its beneficiaries creates that protection.
Tax basis: When the trust passes the property to beneficiaries at death, the entire asset receives a stepped-up basis under IRC § 1014, with no gift to report and nothing that depends on a deed staying in place.
For a full overview of how these structures compare, see Estate Planning for Real Estate Investors. For pricing, see the Real Estate Investor Estate Planning Pricing page.
