Legal Question in Real Estate Law in Nebraska

Re: Purchasing a Town house with parent

There are advantages and disadvantages to taking title with your mother as joint tenants (JTWROS). Two advantages are:

1. When one party dies, title will immediately vest in the survivor and does not pass through probate.

2. There would be no inheritance or estate tax due.

Two disadvantages are:

1. The lender will probably require your mother to co-sign the mortgage which makes her liable if you default.

2. If you are your mother are sued, a judgment may be obtained against the whole property and not just one-half interest. For example, your mother may have a car accident or a prolonged hospital stay and incur a liability above her current level of insurance. Whoever obtains the judgment would be able to take the entire townhouse, if necessary to satisfy the judgment, and leave both you and your mother without a place to live. Any equity you held in the townhouse would be wiped out to satisfy your mother's debt. The same could happen, in reverse, to her if you were sued.

There are a number of other factors you should consider before making this decision which I have not addressed here. It would be advisable to talk with an estate planning attorney, like myself, before you decide. A few hundred dollars spent now for some advice may save you much more in the future.