Does joint tenancy avoid probate in the US?
Yes. Property held in joint tenancy with right of survivorship (JTWROS) passes automatically to the surviving joint owner and bypasses probate. This is a common, simple probate-avoidance tool, but it has gift tax and basis consequences that a living trust or beneficiary designation may handle better.
How does joint ownership affect step-up in basis?
When you die owning property solely, your heirs get a full step-up in basis to fair market value, wiping out the built-in gain. With a non-spouse joint tenant, only the deceased owner's share (typically half) gets stepped up; the survivor keeps their original low basis on their half, meaning more capital gains tax on a later sale.
Is adding a child as joint owner a taxable gift?
It can be. Adding a non-spouse (like an adult child) as a joint owner of real estate or a brokerage account can be a completed gift of a fractional interest. If it exceeds the annual exclusion, you must file a gift tax return (Form 709) and it uses part of your lifetime exemption. Bank accounts are usually a gift only when the joint owner withdraws funds.
What are the risks of joint ownership for estate planning?
Beyond taxes: the asset is exposed to the joint owner's creditors, lawsuits, and divorce; you lose sole control and may need their consent to sell; and it can unintentionally disinherit other heirs since the survivor takes everything. A revocable living trust usually achieves probate avoidance without these downsides.