Q: If there is a lien on a house, can we keep adding joint tenants, generation after generation to pass on the home?
I understand that a joint tenancy postpones the selling of a home to satisfy a lien. If I am a joint tenant on my mom's home, then she dies, the home passes on to me, the house cannot be taken and sold to satisfy the lien. Then I add my son on as a joint tenant and when I die, also, the house cannot be sold to satisfy the lien. Is this correct, that joint tenancy can postpone the house being sold to satisfy the lien as long as there is a living joint tenant?
A: It is not unusual for a mortgage and/or a promissory note to have a provision that accelerates the debt obligation upon the transfer of an interest in the property to another person. To answer your question, you would want to know the specifics of the promissory note and mortgage in question. As a practical matter, mortgage companies do not frequently accelerate mortgages upon a transfer if the loan in being repaid on a timely basis, regardless of whether the mortgage or promissory note has an acceleration clause. There are plenty of reasons why creating a joint tenancy as an estate planning tool is a bad idea. Other than adding a spouse (without the complication of stepchildren), joint tenancy is generally a second-rate estate planning option as compared to other, more practical tools. Your mother should seek advice of an estate planning attorney to determine the best method of providing for a future transfer. A transfer on death deed, creation of a revocable living trust, a will, and a sale with favorable terms would all be possibilities that could potentially provide a better option than a joint tenancy.
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