Joint tenancy may be an almost no-cost estate plan. But it an estate plan that has unintended consequences. You add someone to title. Now his or her creditors and spouse have an interest in the property. If the co-owner incurs debt the house can be used to satisfy the creditors. If the co-owners divorces, the spouse can claim an ownership interest in the house.
There are also tax consequences. Adding someone other than a spouse on title is a taxable gift at the fair market value of the house. The county assessor’s office will consider the addition a transfer that could increase the property tax basis of the house and could increase property taxes.
Finally by adding someone on title you give up control. In the future you will need the permission and cooperation of the joint tenant to take out a loan on the house, improve the house, or sell the house. If your joint tenant does not cooperate, becomes unavailable or becomes incapacitated you are stuck.
Joint tenancy is the low-cost way to plan your estate. You save costs today. But your heirs will pay in the future. The real problem is the unintended consequences. You give up control. You expose yourself to your co-owner’s debts and spouse. You create a taxable transaction subject to gift tax and an annual increase in property tax.