By Lisa Laredo | Laredo Law
on February 16th, 2024
Testators should know the risks before using joint ownership as an estate planning tool.
There are certainly good reasons for owning property jointly with a beneficiary – top among them its effectiveness as a way to transfer assets while avoiding the 1.5 per-cent probate tax otherwise payable on assets in a person’s estate. However, there are other risks inherent in the process, as an elderly Port Hope man recently discovered when he tried to row back on a joint tenancy deal with his grand-niece after relations between them soured while he was still alive.
According to a court decision in the matter, the man originally transferred half of his home – which he previously owned alone following the death of his partner – to his grand-niece as a joint tenant with right of survivorship back in 2012. But by 2020, the man had developed a fear his younger relation would take steps to force him out of the house and instructed his lawyer to revoke the joint tenancy in favour of a tenancy-in common arrangement that would revoke any rights of survivorship.
Whatever your intentions for joint property, it’s important to get them down in writing ahead of time so that everyone is on the same page about why the joint owner has been added, what they can do with the property, and what will happen to it when you die.
As [the elderly man] has now discovered, joint tenancy is a risky way to minimize probate fees. The legal fees that both parties will have to pay to resolve this dispute will far exceed any probate fees that [the grand-niece] would have had to pay.
Robert Charney, Ontario Superior Court Justice
