Home Owned Jointly With a Child, Not the Spouse: What Happens on Death in Ontario?

Many Ontario parents add an adult child to the title of the family home, often to keep things simple later. Usually, when one joint owner dies, the other takes the whole property and it never becomes part of the estate. But if the parent was married and the home was the family residence, a special rule can change the result.

This article explains how that rule works, who it affects (the child co-owner, the surviving spouse and the estate trustee), and what steps typically follow. It is general information, and a lawyer can confirm how it applies to your facts.

The usual rule: survivorship keeps the home out of the estate

Property passes to an estate trustee on death only if no one else has a right to take it by survivorship. Where survivorship applies, the deceased joint tenant's interest goes to the surviving joint tenant or tenants, not to the beneficiaries named in a will.

Being on title together does not always mean survivorship. Land held by two or more people is presumed to be held as tenants in common unless the document shows they are joint tenants, and that presumption also applies where one co-owner is the other's spouse, including a common-law partner. A tenant in common's share does not pass by survivorship. So the first question is how title was actually taken.

The exception: a matrimonial home held with someone other than the spouse

A matrimonial home is property in which a person has an interest and which is, or was at separation, ordinarily occupied by the person and their spouse as their family residence.

If a spouse dies owning an interest in a matrimonial home as a joint tenant with a third person, such as a child, and not with the other spouse, the joint tenancy is deemed severed immediately before death. The deceased's share then goes into the estate instead of to the child by survivorship.

• The rule turns on the home being a matrimonial home, so a cottage, rental property or other home that was not the family residence may be treated differently.
• The child keeps their own interest in the property, but the deceased's share is dealt with through the estate.
• The rule is about married spouses. For property division and equalization, unmarried partners are not spouses. Whether this severance rule reaches a common-law partner's home is worth confirming with a lawyer.

If the surviving spouse has no interest in the home

A spouse who has no interest in the matrimonial home but is living in it when the other spouse dies may stay there, rent free, against the estate for 60 days after the death.

How the share is dealt with through the estate

Once the share falls into the estate, the estate trustee deals with it as part of the estate. The estate trustee may need a Certificate of Appointment of Estate Trustee, because probate is listed as appropriate where the estate includes real property that does not pass by survivorship. If the estate is valued at up to $150,000, a Small Estate Certificate can be sought; above that, the application is for a Certificate of Appointment of Estate Trustee.

Estate administration tax applies too. For applications on or after January 1, 2020, there is no tax on an estate worth $50,000 or less, and above that the tax is $15 for every $1,000 (or part) of the estate's value. Jointly owned property that passes automatically to the other owner is not counted, but here the deceased's share is in the estate, so its value is generally part of the calculation. Ontario real estate is counted, less mortgages.

The estate trustee must also file an Estate Information Return within 180 calendar days after the estate certificate is issued. Income tax is a separate matter: a deceased person is considered to have sold their capital property just before death, which may produce a capital gain on the final return, though a spouse rollover and a principal residence designation may apply.

Survivorship applications and the Family Law Act statement

When a joint owner dies and the land registrar is asked to delete the deceased's name, the application is made under Land Titles Act s. 123. It is a land registry step, not a probate application. For a death on or after March 1, 1986, the application needs one of three Family Law Act statements: the deceased and the surviving joint tenant were spouses at death, the deceased was not a spouse at death, or the property was not the deceased's matrimonial home. Only a solicitor may make and sign these statements.

This is where a child co-owner can run into trouble. If the home was a matrimonial home and the child is not the spouse, a straightforward survivorship application may not be available, and the estate route may be needed instead.

The spouse's equalization choice and what to do next

A surviving married spouse may elect equalization of net family property. If the deceased's net family property was larger, the survivor is entitled to one-half the difference. With a will, the survivor must choose between taking under the will and taking this entitlement. Property the survivor receives by right of survivorship or otherwise on the death is credited against the equalization entitlement, unless a written instrument says they receive it in addition. The election must be filed with the Estate Registrar for Ontario within six months after the death; if none is filed, the survivor is deemed to have elected to take under the will, unless the court orders otherwise. No distribution may be made in the estate within six months of the death.

• Search title on OnLand to see how the home was held; anyone can self-search for a fee, and ServiceOntario cannot search or explain records for you.
• Gather the death certificate, the will if any, and records showing who lived in the home.
• Do not assume the child takes the home; confirm whether it was a matrimonial home first.
• Note the six-month equalization deadline and speak to a lawyer early if you are the surviving spouse.
• Ask a lawyer before any survivorship application is signed, since a solicitor must make the Family Law Act statement.

Frequently asked questions