Putting a child's name on your house or your account does keep that asset out of probate. It also transfers real ownership rights to a living person whose creditors, spouse and judgment you cannot control. The tax saved is 1.5 per cent. Price the rest before you sign.
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From $563.87 taxes included
Property held in joint tenancy passes to the surviving owner by operation of law the instant the other owner dies. It never becomes estate property, so it is not covered by the certificate of appointment and not counted in the estate administration tax. That is the whole saving: nil on the first $50,000 of the estate, and $15 per $1,000 above it. One and a half per cent, on that asset only.
Two people can own the same land two different ways. Tenants in common each hold a distinct share that passes under their will. Only joint tenancy carries a right of survivorship. Which one you have depends on how the transfer was registered, and for land registered under the <a href="https://www.ontario.ca/laws/statute/90l05">Land Titles Act</a> the register says so on its face. A joint tenancy can also be severed, sometimes by one owner acting alone.
Survivorship is all or nothing, and it beats the will every time. If you add one of three children to the house and your will divides everything equally, the house is gone before the estate exists and the other two children get a share of what is left. People do this expecting the survivor to share voluntarily. Sometimes they do. Often the estate litigator gets the file instead.
It also fails in ways nobody plans for. If the joint owner dies before you, the asset is back in your sole name and back in probate. If you both die in the same accident, the outcome depends on rules about the order of death. And adding a joint owner does not remove the need for a will or an estate trustee for everything else you own.
When a parent transfers an asset into joint names with an adult child for nothing, Canadian law presumes a resulting trust. The child is presumed to hold the survivorship interest for the parent's estate, not for themselves. The Supreme Court of Canada set this out in Pecore v. Pecore, 2007 SCC 17. The adult child has to prove the parent intended an outright gift, and proving it after the parent has died is the hard part.
The presumption runs the other way for a transfer to a minor child, where a gift is presumed. Questions of ownership between spouses are addressed by the <a href="https://www.ontario.ca/laws/statute/90f03">Family Law Act</a>, and joint deposit accounts between spouses are treated differently again. So the answer genuinely depends on who was added, when, and why, which is exactly what makes these disputes expensive to run.
What decides them is evidence that existed at the time: a signed declaration of intent, the account opening documents, who used the money, who reported the income on their tax return, whether the parent kept the statements and the control, and what the will says. A fight over a $300,000 account routinely costs more in legal fees than the estate administration tax it was meant to avoid, which on that amount is $4,500.
If you intend a gift, document it in writing when you make it. If you only want help with banking, use a continuing power of attorney for property instead. That gives an attorney authority to operate the account without giving anyone ownership of it, and it ends at death rather than handing the balance to whoever happened to be named.
Transferring half of a property that is not your principal residence to a child is a disposition of that half at fair market value under the <a href="https://laws-lois.justice.gc.ca/eng/acts/I-3.3/">Income Tax Act</a>. The capital gain is realized now, at your marginal rate, and the child's share may not be sheltered by their own principal residence exemption if they live somewhere else. Compare that bill against 1.5 per cent before deciding.
The asset also joins the joint owner's life. A judgment against them, a bankruptcy, or a marriage breakdown can reach the interest you gave them, and a home they live in can attract claims under family law. You cannot sell or mortgage the property without their signature, and if they lose capacity you may need their attorney or the court to deal with your own house.
Registration has its own cost. Where consideration passes, including a share of an assumed mortgage, land transfer tax can apply under the <a href="https://www.ontario.ca/laws/statute/90l06">Land Transfer Tax Act</a>, and transfers between spouses are treated under their own rules. Get the tax position confirmed before the transfer is registered, because unwinding a registration later costs more than getting the advice first.
There are cleaner tools. Beneficiary designations on registered plans and life insurance move those assets outside the estate without giving anyone rights while you are alive. Multiple wills keep private company shares out of the probated estate. A trust can hold property with real terms attached. And sometimes paying the tax is simply the cheapest option. Our <a href="/wills-estates">wills and estates</a> page sets out how we work, with fees on the <a href="/pricing">pricing page</a>.
If it is registered as a joint tenancy with a right of survivorship, the property passes to him at your death outside the estate, so no estate administration tax is charged on it. That much works. Whether he keeps it as his own or holds it for your estate is a separate question the law does not answer in his favour automatically.
The tax question usually arises at the transfer, not the death. Giving away an interest in property that is not your principal residence is treated as a sale at fair market value, so you may realize a capital gain in the year you add him. He then holds his share with its own cost base and exposure to future gains. Get the numbers first.
Only with the other owner's cooperation, because they now own an interest. A transfer back is another disposition with its own tax and registration consequences, and if their creditors have registered anything against title it may not be possible at all. This is why the decision deserves advice beforehand rather than a quick trip to a lawyer to sign a transfer.
That is the most litigated version of this. If the account was opened so someone could help with banking, the survivorship interest is presumed to be held for your estate, and the balance belongs to the beneficiaries under your will. Say so in writing when you open it. Better still, use a continuing power of attorney for property instead.
Sometimes. Estate administration tax runs at $15 per $1,000 above the first $50,000, so a $500,000 estate pays $6,750. Weigh that against capital gains realized on transfer, exposure to the joint owner's creditors and separation, loss of control, and the cost of litigation if your intention is later disputed. For many families the answer is no.
Open your file tonight — a licensed Ontario lawyer will confirm everything with you by tomorrow.