The concept of one or more children holding real property as joint tenants with aging parents to avoid probate fees is well known. This type of ownership can also be extended to joint bank accounts and investments such as your stocks.
When property is owned jointly by spouses, it can make for good planning provided the union does not fracture and the intention is to leave everything to the survivor on death.
However, there can be disadvantages or conflicts where a parent holds assets jointly with his or her children for convenience or to reduce probate costs.
While joint ownership is often a wise course of action, there possibly can be a loss of control or authority over jointly registered assets that could lead to family conflicts.
An ounce of prevention is certainly worth a pound of cure. When real properties are put in joint names or assets put in joint accounts, the transferor should be urged to prepare a simple written statement of his or her intention in making the transfer. Be sure to make it clear whether it is merely a matter of convenience or whether a gift is intended. Evidence of intention can also be revealed by a statement in one’s Will.
Your Will can state that the estate trustees need not investigate the nature of any jointly held assets and declare that it is the intention of the testator to have made a gift of his or her interest in any joint property to the surviving joint owner.
At a time when many structure their affairs to reduce probate fees by registering assets jointly with their children or others, many plans may be frustrated if jointly held assets are subject to a resulting trust in favour of the deceased estate. This could result in probate fees being levied on the assets. Since this is often the result of a disgruntled beneficiary under the deceased’s Will (such as another child who was not a joint owner) challenging the transaction, evidence of intention, such as a statement in one’s Will, allow such simple estate planning to be more effective.
Brigitte DioGuardi, B.A., LL.B.