Probate can be a time-consuming and expensive process, prompting many families to look for ways to keep their assets out of court. One tool that you might find worth exploring is the joint ownership option.
Joint title as a probate-avoidance strategy
Wisconsin’s Marital Property Act governs how spouses hold assets acquired during their marriage. Under this framework, property titled jointly between spouses may carry different legal implications than property held with a non-spouse. These ownership arrangements determine whether the surviving co-owner receives the asset automatically or whether the deceased person’s share passes through the estate.
Common forms of co-ownership
The state recognizes the following forms of shared property ownership:
- Joint tenancy with right of survivorship: Each owner holds an equal share, and the surviving owner inherits full interest at the other owner’s death.
- Tenancy in common: Co-owners may hold unequal shares, but there is no right of survivorship. When one owner dies, that person’s share becomes part of the estate.
- Survivorship marital property: This form functions similarly to joint tenancy and allows the surviving spouse to receive the property without probate.
A mislabeled deed or missing survivorship clause can result in unintended probate proceedings even when the original goal was to avoid them.
Hidden risks behind this agreement
Adding a co-owner to avoid probate can expose the asset to that person’s creditors, legal disputes or money troubles. Once someone else holds title, their debts and liabilities may follow the property no matter what you intended.
A more personal risk is unintended disinheritance. If you add one child to a property title, that child may inherit the full asset at your death and exclude other heirs—regardless of what your will states. This result can create family conflict and undermine an otherwise thoughtful estate plan.
There are tax and benefits implications worth considering too. Transferring a partial interest in property may trigger federal gift tax obligations, and in some cases, it can affect eligibility for Medicaid during the five-year look-back period.
Furthermore, if both co-owners die at the same time or within a short period, Wisconsin’s survivorship laws may prevent the automatic transfer from taking effect. In that situation, the property could still pass through probate despite the joint title.
Complementary tools to consider
A transfer-on-death deed lets you name a beneficiary for your real property who receives it at your death without probate. You keep full control during your lifetime and can revoke or update the choice at any point without affecting your ownership.
Revocable living trusts offer another layer of flexibility by letting property pass to beneficiaries without court proceedings. Beneficiary designations on retirement accounts, life insurance and bank accounts work the same way, directing assets to specific people outside of court.
An attorney can review how your assets are titled and identify gaps in your current plan. Using these strategies together may reduce the chance that any part of your estate ends up in court.
