Legal Question in Real Estate Law in California

SUPER bad idea. To start, you open yourself up to gift tax on 50% of the equity in the property. If you have a mortgage, you will be in default under the due on sale or transfer clauses in every mortgage that require repayment in the event title is transferred at all. So then even if the bank OK's it or you re-fi with niece on title, the property gets reassessed under Prop 13 to full market value on her 50% share. And then, down the road when it passes to her as the survivor under JTWROS, and then eventually sells it, she pays capital gains tax on the entire increase in value from the day you bought it.

Contrast that with setting up a trust that passes title to her upon your death. No gift tax. She is entitled by law to keep the existing mortgage as long as she keeps making the payments. I believe there would still be a Prop. 13 reassessment because only parent child and grandparent to grandchild transfers are exempt. However, once she goes to sell the property, capital gains will only be owed on any increase in value from your date of death, not when you bought the property.