Should I Try to Save Probate Fees by Putting My Home in my Children’s Name as a Joint Owner?

In Ontario, it is possible to transfer ownership of a property to your child or establish joint ownership with them as a way to potentially save Probate fees. However, it’s important to understand the implications and potential drawbacks associated with this strategy.

When you transfer ownership of a property to your child or establish joint ownership, it means that your child becomes a co-owner of the property. While this may have benefits such as avoiding Probate fees upon your passing, there are several important considerations:

1. Loss of control: Once you transfer ownership or establish joint ownership, your child has an immediate legal interest in the property. This means they will have a say in decisions regarding the property, and you may lose control over its management and future disposition.
2. Liability and creditor issues: If your child faces financial difficulties, goes through a divorce, or encounters legal issues, the property may be at risk. Creditors or legal judgments against your child could potentially impact the property that is jointly owned.
3. Potential tax implications: Transferring ownership or establishing joint ownership can trigger tax consequences, such as capital gains tax or land transfer tax. It’s crucial to consult with a tax professional to understand the potential tax implications before making such decisions.
4. Unequal distribution among beneficiaries: If you have multiple children and transfer ownership or establish joint ownership with only one child, it may result in an unequal distribution of assets. This can lead to family conflicts and disputes. This can also be significant given the price of homes in Ontario.

It’s important to note that while transferring ownership or establishing joint ownership can potentially help avoid Probate fees on the property, other assets in your Estate may still be subject to Probate (if you have not done proper Estate planning). Additionally, recent changes to Ontario’s Estate laws have introduced alternative Estate planning strategies, such as multiple Wills, which can achieve similar objectives without the drawbacks associated with joint ownership.

To navigate these complexities and determine the best approach for your specific circumstances, it is strongly recommended to consult with an experienced Estate planning lawyer or professional in Ontario. They can provide personalized advice and guidance tailored to your needs and objectives.

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Ontario’s Succession Law Reform Act