Most real estate professionals seem to recommend that married buyers take title to their new home as joint tenancy with right of survivorship. Not all that bad. But it is generally advisable for a Nevada couple to take title as “community property with right of survivorship.” Though we are not tax experts, we understand that the reason for this is a tax reason: when one joint-tenant spouse dies, the deceased spouse’s half interest in the property gets a stepped-up basis. The surviving spouse’s interest keeps the date of purchase basis. If the couple has owned the home for many years, the tax consequence can be significant.
If, instead of joint tenancy, the couple held their home in community property with right of survivorship, the basis in BOTH the deceased and the surviving spouse’s interest in the home is stepped up to the date of death of the deceased spouse.
Another thing. If, say, to avoid probate you put one of your kids on title to your property as a joint tenant, thinking that will avoid probate, you are right. But if your kid is sued, you risk losing your house. That is because each joint tenant owns 100% of the house, via a legal fiction. It is generally better, therefore, to keep the kids off of the title and, if you want to avoid probate, deed it to your kid via a Nevada deed conditioned on death. That way the kid has no ownership interest in the home until you die. You can change your mind, give it to someone else or sell it without your kid’s permission. And, if the kid gets into serious financial trouble, you can always change your mind (if still competent) and give it to him or her by way of a spend-thrift trust, which will protect it from his creditors.