Adding a Child to Your House Title in BC: Joint Tenancy Risks

Many older homeowners consider putting an adult child on the title to the family home. The usual reasons are to make things easier later, to avoid probate, or to get help with the property. It can look like a simple paperwork step.

In practice it changes who owns part of your home, and it can create problems for you, for your child and for the rest of your family. This article walks through the main risks in British Columbia so you can ask better questions before you sign anything.

This article covers the law of British Columbia.

What adding a child to title really does

Putting your child on title makes them a registered owner. How the two of you hold title matters a great deal. In BC, land transferred to two or more people is held as tenants in common unless the transfer document shows a contrary intention, and unstated interests are presumed equal. If you want survivorship, the document needs to say so.

If you hold as joint tenants and one of you dies, the survivor takes the deceased's interest. That is why joint title is often described as a way to skip the estate. It is also why the decision is hard to undo casually.

Loss of control and your child's own life

Once your child is an owner, you may need their cooperation to sell or mortgage the home. Their circumstances also become part of your risk. A judgment against one co-owner does not sever the joint tenancy, so it does not change who takes by survivorship. That does not mean your child's creditors or disputes are harmless to you, and the practical effects depend on the facts, so ask a lawyer.

• Your child may need to agree before the home can be sold or refinanced.
• A debt, judgment or lawsuit involving your child can complicate dealings with the property.
• If your child separates from a spouse, their interest may be argued about as part of a family property dispute. Whether it counts depends on the definitions of family property and excluded property in the Family Law Act.
• Your child's death before yours could leave you co-owning with someone else, depending on how title is held.

Estate disputes: a gift or held for you?

Disputes often start when other children or beneficiaries learn the home went to one child. In Pecore v. Pecore, the Supreme Court of Canada said a gratuitous transfer to an adult child, including adding them to a joint account, is presumed to be held on resulting trust for the parent. The survivor must then prove the parent intended to give them the right of survivorship.

The judge weighs all the evidence on a balance of probabilities to find your actual intention when you made the transfer, and the presumption decides the case only if the evidence is insufficient. The presumption of advancement (gift) does not apply to adult children, though an adult child's dependency on the parent can be strong evidence against the resulting trust presumption. Pecore concerned a joint account, but its reasoning is often raised for property transfers too, so a lawyer can tell you how it may apply to a home.

The lesson is practical: write down why you are adding your child and what you intend, ideally with legal advice at the time.

Survivorship, your estate and family claims

A person's estate vests in the personal representative without further declaration or order, but land held by survivorship sits outside that estate. This is why joint property can be left out of what the will covers. It can also leave the rest of your family feeling that the will no longer reflects what you planned.

The court may order provision from the estate for a spouse or child who was not adequately provided for by the will, and a wills variation claim must start within 180 days after the grant is issued in BC. How survivorship property fits into such a claim is a legal question that depends on the facts. If you have several children or a spouse, this is a good reason to speak with a lawyer before changing title.

Tax, costs and what to do next

Transferring part of your home can raise property transfer tax and income tax questions. The answers depend on your circumstances, including whether the home is your principal residence, so confirm them with a lawyer or accountant before you proceed. When a joint tenant later dies, a survivorship transfer may qualify for property transfer tax exemption code 08, which does not apply to additional property transfer tax.

• Write down why you want to add your child and what you intend.
• List the alternatives you could discuss with a lawyer, such as a power of attorney or a will-based plan.
• Think about your other children, your spouse and your child's spouse.
• Ask a lawyer how title should be worded: joint tenants or tenants in common.
• Ask a lawyer or accountant about property transfer tax and income tax before you transfer.

Frequently asked questions