Written By: Samantha Banks, Attorney [Titling Property]
Summary: How you title real estate determines whether your home avoids probate, faces creditor or Medicaid claims, and transfers smoothly to heirs. While options like joint tenancy or transfer on death deeds offer basic probate avoidance, using a trust provides stronger protection and control. Working with an estate planning attorney ensures your property is titled correctly to protect your family’s assets.
When purchasing a home or other real estate, most of the attention goes to the price, the mortgage, and the inspection. Almost no one stops to think carefully about how they’re actually taking title at closing. However, the ownership structure on the deed determines what happens to the property when you die, how exposed it is to creditors or Medicaid, and whether your family ends up in probate court. Here’s a rundown of the most common ways to title real property, and why many estate planning attorneys recommend going a step further and moving the property into a trust.
Sole Ownership
The simplest form of title: one person owns the property outright, with no co-owners. On that person’s death, the property passes according to their will — or, if there’s no will, according to state intestacy law. Either way, it typically has to go through probate before it can be transferred to heirs unless the property passes to beneficiaries through a trust or transfer on death deed.
Tenants in Common
When two or more people own property as tenants in common (TIC), each owner holds an individual, undivided share of the whole property. Those shares don’t have to be equal — for example, one owner might hold 70% and another 30%.
The key feature of TIC ownership is that there’s no right of survivorship. When one tenant in common dies, their share doesn’t automatically pass to the other owner(s). Instead, it passes through their estate — via will or intestacy — and typically goes through probate unless further planning is done. This makes tenants in common a popular choice for co-owners who aren’t married or who want their share to go to their own heirs rather than automatically to the other co-owner.
Joint Tenants with Right of Survivorship
Joint tenancy with right of survivorship (JTWROS) is different in one crucial way: when one joint tenant dies, their interest automatically passes to the surviving joint tenant(s) — no probate required. The property simply passes by operation of law, typically requiring nothing more than recording a death certificate or affidavit of survivorship.
This makes JTWROS popular between spouses and family members who want a simple, low-cost way to avoid probate. But it comes with real trade-offs:
- You give up control over your share. You can’t leave your interest to someone else in your estate plan — it goes to the surviving joint tenant no matter what your estate plan says.
- Creditor exposure. If a co-owner runs into debt, a lawsuit, or a bankruptcy, their creditors may be able to reach the property.
- Delays probate…Temporarily. JTWROS avoids probate when the first owner dies, but when the last surviving joint tenant dies, the property still goes through probate unless further planning is done.
- Gift tax and basis issues. Adding someone to title as a joint tenant can be treated as a gift, and it can also affect the “stepped-up basis” the property would otherwise receive at death, potentially increasing capital gains tax for the survivor down the road.
Transfer on Death Deeds in Indiana
A growing number of states now allow a transfer on death deed (TODD), sometimes called a beneficiary deed or ladybird deed. This lets an owner record a deed during their lifetime naming a beneficiary who will receive the property automatically at the owner’s death — without probate.
The appeal of a TODD is that it’s simple and revocable: the owner keeps full control of the property while alive, can sell it, mortgage it, or change the beneficiary at any time, and the deed only takes effect at death. It avoids probate without requiring the owner to give up any current ownership rights, which is a meaningful advantage over adding someone as a joint tenant.
That said, TODD’s have limits. They’re not recognized in every state, they don’t help with incapacity planning (if you become unable to manage your affairs before death, a TODD does nothing — you’d still need a power of attorney or a trust), and because they only take effect at death, they offer no protection from your own creditors or long-term care costs during your lifetime.
Furthermore, TODD’s are not ideal for those with multiple heirs who may need additional restrictions or protections in place when they inherit, or for those who have specific wishes regarding the treatment of the property after death.
Why a Trust is Usually Best for Titling Property
For many homeowners — especially those with significant equity, more complex families, or long-term care concerns — an attorney will often recommend deeding the property into a trust rather than relying on joint tenancy or a TODD alone. But it’s worth being precise about what different trusts actually accomplish, because this is an area full of misconceptions.
Revocable Living Trusts (RLT)
RLT’s are the most common tool for avoiding probate. Property deeded into a RLT passes to your named beneficiaries pursuant to the terms of the trust, without going through probate court, and you retain full control over the property during your lifetime — you can sell it, refinance it, or change the trust’s terms at any time. This is a genuine and significant benefit: probate can be slow, public, and costly.
However, an RLT does NOT protect the property from your creditors or from Medicaid if you need long-term care. Because you retain full control of the assets inside of the trust and can revoke the trust at any time, the law treats the assets in a RLT as still belonging to you. If you’re sued, a creditor can generally still reach it. If you apply for Medicaid to help pay for long-term care, the property is still counted as your asset.
Irrevocable Trusts
Irrevocable trusts are a different matter. Once you transfer property into a properly structured irrevocable trust and give up control over it, it can be shielded from your creditors and excluded from your countable assets for Medicaid eligibility purposes. This is the basis of what’s often called “Medicaid asset protection planning.” But there are important catches:
- Medicaid has a five-year look-back period. Transfers made within five years of applying for Medicaid for long-term care can trigger a penalty period during which you’re ineligible for benefits. This isn’t a strategy you can execute at the last minute — it needs to be done well in advance of needing care.
- Giving up control is real, not just on paper. Depending on how the trust is structured, you may lose the ability to sell, refinance, or change your mind about the property.
- These trusts need to be drafted carefully by an attorney experienced in Medicaid and elder law; a generic trust template can fail to accomplish the goal or create unintended tax consequences.
The Bottom Line
There’s no single “best” way to title real property — the right choice depends on your family situation, your state’s laws, your health, and your timeline. Joint tenancy is simple but limits control and can expose the asset to a co-owner’s creditors. Transfer on death deeds are a good lightweight tool for probate avoidance where available but can actually create more issues after death depending on your family situation. Revocable trusts are excellent for avoiding probate and keeping matters private but shouldn’t be mistaken for creditor or Medicaid protection. True asset protection from long-term care costs generally requires an irrevocable trust set up well ahead of time.
Because the stakes involve what is often people’s largest asset, your family’s inheritance, and potentially your eligibility for long-term care benefits, this is a good area to sit down with an estate planning or elder law attorney, like us, rather than go it alone. The right structure, put in place early, can save your family significant time, money, and stress down the road.
Here at Indiana Estate & Elder Law we can provide guidance and recommend the best tool for appropriately titling your property to help you meet your goals and achieve peace of mind.