Consider the following: a widowed retiree decides to add one of his adult children as a joint tenant on title to his home. Even if the adult child never lives in the home, the father is taking on significant risks. For example, if that adult child were to go into debt, his or her creditors would be able to claim an interest in the father’s home. If the adult child were to get a divorce, his or her former spouse would be able to claim an interest in the family home.
Perhaps the father and the adult child were to get in a fight and become estranged from one another. If at some point in the future the father decided to sell the home, the adult child could refuse to sign the transfer paperwork and delay or otherwise prevent the transfer from occurring. Worse still, he or she might refuse to sign unless they received payment for their ‘share’ of the proceeds.
Perhaps the father passed away leaving multiple adult children. Although the legal ownership of the property would pass to the adult child as the surviving joint tenant, the property would be presumed to be held by that adult child on a resulting trust for the father’s estate. He or she might be unwilling to accept that reality, therefore creating additional hurdles for the person administering the father’s estate (including a potential court action).
All of this is to say that while the temptation to reduce probate fees via joint tenancy may be tempting for some individuals, this is a decision that most certainly requires legal advice. Although it may be possible to curtail some of the risks, generally speaking, a transfer into joint tenancy with someone other than a spouse is a roll of the dice that may end up costing you more in the long run.
This article is intended for information purposes only and should not be taken as the provision of legal advice. Grace C. Cleveland is a lawyer with the law firm of Cleveland Doan LLP and can be reached at (604)536-5002 or firstname.lastname@example.org.