10/14/2025
The "simple" act of adding your adult child - or any beneficiary - to your Colorado property's title could end up being incredibly costly for you or your beneficiaries.
I often meet well-meaning, generous individuals who would like to pass their real estate on to their children, sibling, or someone else, without hassle. They don't really know what probate is but heard they should avoid it. They find out about joint ownership with right of survivorship being a quick, easy way to pass property and avoid probate. Sometimes - and most real estate agents are far more savvy than this - I've even had my client's agent recommend this method to pass property to the client's heirs.
However, here are three major issues with this approach:
1) Your beneficiaries will very likely lose a basis adjustment in the property ("step-up in basis") upon your death. This could be 10's or even in the six-figures of added tax liability for your beneficiary. - I promise you this will very likely be more painful than any probate in Colorado.
2) Your property becomes exposed to all of the co-owner's liabilities.. If your child/beneficiary faces a divorce, lawsuit, creditors - then that is now your problem.
3) Your beneficiary now has equal rights on your property. This could lead to disputes about remodels, renting logistics, when to sell, etc.
This is another example of why investing in professional estate planning advice tailored to your situation is valuable. Your family's future is probably something you do not want to go cheap on.
Joint ownership often creates more problems than it solves.
For help with your specific situation, please reach out to our office and we'd be glad to help.
