Olev Edur answers your questions about your rights, personal finance, and estate planning
I’m a widow in my late 70s. After my husband passed away, I placed our home into joint ownership with my daughter. I was told that this was okay because she doesn’t own property. Now I’m wondering: will she have to pay capital gains tax when I pass away and the property goes to her in its entirety? What about probate fees?
No, and possibly no. Since this is your principal residence (and presumably would be hers in part as well), there should be no capital gains tax liability for your daughter upon the transfer of your share of the property or afterwards when she owns it entirely and it continues to increase in value.
And since the property is jointly owned, it should go directly to her, without it becoming part of your estate and therefore subject to probate.
The operative word in that last sentence, however, is “should.” If the ownership arrangement specifically provides for a “right of survivorship,” then everything will be fine—the property will go directly to your daughter as expected.
Sometimes, however, people in this situation mistakenly create a joint arrangement whereby the two owners are “tenants in common.” If this is the case for you, then when you pass on, your daughter’s portion will revert back to your estate and become subject to the costs and delays involved in probate.
I suggest that you double-check the wording of your joint-ownership agreement with a lawyer who is versed in real estate and joint-ownership arrangements, just to ensure that it specifically includes that right of survivorship.
Otherwise, there could be problems when the time comes, and at that point changes can no longer be made.
