- Property that passes by survivorship goes straight to the surviving owner and not into the estate, whether or not there is a will.
- Some jointly held property falls back into the estate, such as a tenant in common's share or a matrimonial home held jointly with a third person.
- Whether a particular creditor can reach a particular joint asset depends on the debt and how the asset was held, so get advice before assuming either way.
You have just become the sole owner of a house or bank account because the other owner died. Then you hear that the person who died owed money. It is natural to wonder whether the estate's creditors can come after what you received.
The answer starts with how the property was held. Some joint property sits entirely outside the estate, and some does not. This article explains the main rules in Ontario and the points where a lawyer's advice matters.
Why survivorship usually keeps joint property out of the estate
When a person dies, property passes to their estate trustee only if no one else has a right to take it by survivorship. Property that passes by survivorship goes straight to the surviving owner, not into the estate.
Survivorship also overrides the will. A deceased joint tenant's interest goes to the surviving joint tenant or tenants, not to the people named in the will.
Having two names on title does not by itself create survivorship. Land given to two or more people is generally held as tenants in common unless the document shows on its face that they take as joint tenants. Spouses and common-law partners also hold as joint tenants only if the deed says so. A tenant in common's share does not pass by survivorship.
What creditors can and cannot count on
How a particular creditor can recover a debt from the estate or from property you received depends on your situation, so it is worth confirming with a lawyer. Joint property that passed to you by survivorship is generally not part of it. That does not mean every creditor is shut out in every situation.
For example, the Succession Law Reform Act rules that pull some joint assets into the estate for a dependant's support claim do not affect creditors' rights in any transaction where they have rights. Whether a specific creditor can reach a specific asset depends on the kind of debt, how the asset was held and what steps the creditor took. That is a question for a lawyer.
If a creditor registered a writ of execution against land, the search need only be made against the exact name of the registered owner, and a writ filed under a different name has no effect. Joint bank accounts carry their own risk. Any named holder can withdraw at any time, and if one holder has financial problems or goes bankrupt, creditors could make claims on the money.
When joint property can fall back into the estate
| Situation | What happens |
|---|---|
| Land held as tenants in common | The deceased's share does not pass by survivorship |
| Matrimonial home held jointly with someone other than the spouse | The joint tenancy is deemed severed immediately before death, and the share goes into the estate |
| Adult child added to a parent's asset without paying | The child is presumed to hold it in trust for the parent and, on death, the estate |
| Last surviving joint owner dies | No one is left to take by survivorship, so the land goes to that person's estate trustee |
| Joint owners die at the same time or it is uncertain who survived | Each is deemed to have held as a tenant in common, and each share passes through that owner's own estate |
The adult-child situation matters most. The person who received the transfer must generally show that a gift was intended. Courts may look at the bank documents, who controlled and used the funds, any power of attorney and the tax treatment. If the asset is held in trust for the estate, it may be exposed in ways that true survivorship property is not.
Taxes and the deceased's final return
Taxes owed on death are a separate issue. A deceased person is considered to have sold all their capital property just before death, which may produce a capital gain on their final return, even if the property passes by survivorship.
Property transferred to a surviving spouse or common-law partner who is resident in Canada can roll over without immediate gain in certain cases. On estate administration tax, jointly owned property that passes automatically to the other owner is not counted, but a joint asset that the survivor holds on resulting trust for the estate does not escape the tax.
What to do next
- Find out how title was actually held. Land records, including the parcel register, are searched through OnLand.
- Gather the bank account documents and note who put money in and who used it.
- Keep a list of the debts you know about, including any tax owing.
- Do not spend or transfer large joint funds until you know whether they could be claimed as estate property.
- Speak with an estate lawyer or accountant before you decide that a creditor cannot reach an asset.
Frequently asked questions
Are jointly owned assets part of the estate?
Property that passes by survivorship goes straight to the surviving owner and not into the estate. Property held as tenants in common does not pass this way, so that share is dealt with through the estate.
Do I have to sell a house I received by survivorship to pay the deceased's debts?
Not automatically, because survivorship property is generally outside the estate. Whether a particular creditor has a claim depends on the facts, so get legal advice before you assume either way.
Can a joint bank account be challenged after the death?
Yes. Heirs may challenge the survivor, who may need to show the deceased intended the funds as a gift. An adult child added to a parent's account is presumed to hold it in trust for the parent unless a gift is shown.
Does survivorship avoid tax on death?
No. The deceased is considered to have sold capital property just before death, even if it passes by survivorship. A rollover may be available for a surviving spouse or common-law partner in certain cases.
Sources
- Estates Administration Act, R.S.O. 1990, c. E.22, s. 2(1) (e-Laws) — Ontario e-Laws
- Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34, s. 13(1) (e-Laws) — Ontario e-Laws
- Family Law Act, R.S.O. 1990, c. F.3, s. 26(1) (e-Laws) — Ontario e-Laws
- Succession Law Reform Act, R.S.O. 1990, c. S.26, s. 72(5)-(7) (e-Laws) — Ontario e-Laws
- Land Titles Act, R.S.O. 1990, c. L.5, s. 120 (e-Laws) — Ontario e-Laws
- Ontario.ca, Land Registration Bulletin 98003 Writs of Execution — ontario.ca
- Ontario.ca, Search land property records — ontario.ca
- Ontario.ca, Estate Administration Tax — ontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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