homepage logo

Real Estate Law | Adding grandson as joint owner of property could create problems

By ERIC P. FEICHTHALER - Real Estate Law | Jan 22, 2024

Eric P. Feichthaler

Mr. Feichthaler:

I have a vacant lot in Cape Coral that I have owned for over 30 years. Thankfully, it has increased in value substantially. I have a grandson that I want to benefit from the value of this property, so I want to add him as an owner now, with me jointly. Do you see any issues with this? I know he has had some trouble with his finances, so I just want to help out.

Beverly N.

Dear Beverly,

I have the pleasure of representing many clients like you, that want to share their blessings with family members and friends. Your generosity is noted and appreciated. However, like so many others have learned, there can be unforeseen negative consequences to your proposal.

First, by adding your grandson as an owner, you will not be able to sell the property without his consent and approval. If you ever have a falling out with him, this could become an incredible stress for you. Also, if your grandson has a judgment or IRS debt entered against him, it could now be attached to your property. Eventually, if he doesn’t pay that debt, a foreclosure could occur on the property.

From a property tax perspective, you may benefit from the cap on increases in assessed value on non-homestead properties, like vacant lots and investment properties. Given that you held this property during the recession, you may be taxed at a substantially lower rate than market value. By adding owners, you could lose part of that savings.

Many new clients contact me with requests similar to yours, and we often recommend an Enhanced Life Estate Deed. This offers an economical option that results in the property passing directly to your grandson without probate. While living, you retain full rights to the property, including the right to sell or mortgage. In some cases, like yours, a trust to hold the property may be in everyone’s best interests. For example, if you placed the property in trust, the interest to benefit your grandson could be retained in the trust, protecting that asset from his creditors if you died. I recommend this method when, for a variety of reasons, it may not be in the best interests of a client’s beneficiaries to allow them direct ownership of the asset. It is advisable to speak to an attorney to provide them all of the details of your intentions and the potential issues of your grandson, and formulate a plan that best protects your hard-earned assets.

Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Cape Coral to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, and Cape Coral Kiwanis. He has been married to his wife, Mary, for 22 years, and they have four children. He earned his board certification in Real Estate Law from the Florida Bar, and primarily practices in real estate law and wills and trusts. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.

This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.