Joint ownership strategies in estate planning

The transfer of a parent’s property into joint ownership with a child is a popular estate planning tool which may be of benefit to the estate’s beneficiaries, but not always.

That strategy must be approached with caution because sometimes what looks good on its face can create hidden complications.

The allure of the potential for greater ease in the administration of the estate and the prospect of potentially avoiding probate and fees that go with it can tempt people to leap off this cliff, sometimes only to find that they may have forgotten a parachute.

The unexpected implications of such a decision has sometimes lead persons to contemplate if a total consideration of all of the impacts and the interests of the estate and its benefactors would have been preferable in retrospect.

Potential issues related to joint property ownership may include:

• The potential immediate land transfer tax consequences on transfer into joint ownership
• The loss of capital gain exemption on the portion owned by a non-resident owner
• The exposure of property to creditor and matrimonial claims
• Loss of control
• Co-owner disputes
• Original owner loss of financial sustainability
• Joint owner may not be only intended owner on death of original owner
• May trigger estate dispute because of the applicability of the law of resulting trust
• Incapacity of a joint owner may impair ability to deal with property before death
• Potential need for trust reporting to CRA
• Unsuitable for most U.S. owned properties

Contact our offices to speak with an estate planning specialist so that the estate planning strategy you select is the right one for you and your loved ones.

_{David van der Woerd is a partner at Ross & McBride, where he acts on behalf of individuals and organizations in the business and charitable sectors. As an active volunteer in the legal and broader communities, David has served on a range of not-for profit boards and supported a long list of community events. Throughout his career, he has taught law at various levels and is frequently sought after as a speaker and contributor to legal publications.}

This article was originally published by The Hamilton Spectator.