-Willing Shareholder in Brooklyn
“You propose adding your daughter’s name to the apartment so that you and she own it jointly. Such a change may require the consent of the co-op board. With joint ownership, if your daughter survives you she will be the sole owner of the apartment after your death by law. Although no court proceedings would be necessary with respect to the apartment, your other children would not inherit any share of the apartment. Presumably, you desire to have all your children share your entire estate equally, and so this arrangement would defeat your estate plan. The daughter you named as joint owner could, of course, sell the apartment and give a portion of the sale proceeds to your other children, but she can’t be forced to do so, and if she chooses to do so the amount that she gives them would be a taxable gift. There is also the possibility that the daughter you named as joint owner will die before you. In that case, you will have accomplished nothing. Since you would then be the sole owner, surrogate’s court proceedings would be necessary at your death.
“You could perhaps add all your children as joint owners, but if any of them die before you, the deceased child’s surviving descendants would be disinherited. And even if you manage to avoid probate with regard to your apartment, if you have any other property besides the apartment in your own name, court proceedings would nevertheless be required to administer that other property.
“You could establish a Revocable or Living Trust during your lifetime and transfer your apartment to the trust, naming yourself and perhaps a child as trustees. You would retain the right to reside in the apartment during your lifetime and to have any other property you add to the trust distributed to you at any time. You would direct in the trust how the trust property is to be distributed at your death, such as to your descendants who survive you, per stirpes. Per stirpes is a stipulation that, should a beneficiary predecease the testator, the beneficiary’s share of the inheritance will go to his or her heirs.
The trust would be subject to revocation or amendment by you during your lifetime. If executed in the manner required by law, the trust will be effective upon execution and funding. Since the trust itself directs how the trust property is to be distributed at your death, no probate proceedings would be necessary as to any property owned by the trust (but if you inadvertently fail to transfer all your probate property to the trust during your lifetime, probate or administration proceedings will be necessary after your death to administer all such property not so transferred). Also, revocable trusts, unlike certain other trusts (such as Qualified Personal Residence Trusts) provide no estate tax advantages.