Why is Joint Tenancy With Right of Survivorship a Poor Way to Title My Marital Assets?
For a husband and wife whose joint estate does not exceed the combined exemption amount, joint tenancy may be adequate for estate tax purposes. It does not, however, help avoid probate upon the death of the surviving spouse or upon the simultaneous deaths of both spouses. Nor does it address the issues highlighted in the previous answer. For married couples having estates larger than the combined exemption amount, joint tenancy can subject a family to federal estate taxes that easily could have been avoided. This is because the spouse who dies first cannot use his or her exemption amount. If you hold property jointly with a spouse in a non-community property state, at your death only your 50 percent of the property receives a “step up” in basis (cost basis “stepped up” to fair market value at date of death). This means that if your spouse wants to sell the property after your death, he or she may have to pay unnecessary capital gain taxes on his or her 50 percent of the property, which
