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Saturday, August 3, 2013

Should I add my child's name to the title of my house to avoid tax in the future?

An awful lot of parents have added their children to the title of their homes without getting legal or accounting advice first. In fact, I'm amazed at how many people have done this, given the risks and complications. A reader wrote to me to ask about whether he should add his oldest daughter to his house title. I suggest that anyone who is considering making this move, or has already done so, should read this post for some food for thought. His question and my reply are below:

"I am in the middle of purchasing a residential property. Is there any advantage if I purchase in my name + wife's name and eldest daughter's name. My thinking is for future when we both are not here, then our daughter retains this property without any tax implications."

When considering putting extra names on a title, it's a mistake to focus on just one aspect of the transaction, whether that aspect is tax, probate avoidance or any other concern. You have to look at the bigger picture.

You have to realize that in adding your daughter's name to your home, you are creating a huge risk to yourself. There are a dozen ways in which this could cause you to lose your home, or to lose a substantial sum of money to hold onto your home. If your daughter were to get divorced, her spouse could claim half the value of the house and if she doesn't have the funds to pay this out, you could end up paying it yourself just to stay in your own home.

If you are like most parents, you will stubbornly believe that your daughter will never do anything that would negatively impact you. As a parent, I understand that faith, but as an estate lawyer I know how misplaced it is. There are things that could happen to your daughter accidentally that could cause you to lose your home. For example, if she is sued because of a car accident or if she declares bankruptcy or if she has a business failure for which she has provided a personal guarantee, you could lose your home. It's impossible to say at this moment that none of these things will happen during your lifetime.

You also need to look more closely at your presumption that your daughter will "retain this property". It sounds as if you have more than one child. If you have a will that leaves your estate equally among  your children, you have to ensure that you are clear about whether this house is part of her share. Otherwise it could lead to a dispute among the children.

You may run into the issue of inter-generational joint property. From what you've said, your intention is not for her to own the property but simply to avoid tax issues. Therefore it isn't a "true" joint ownership in the sense that you don't intend for her to own and retain this property for her own use after your death. Your property may be held in trust for the estate until a judge decides on the available evidence whether or not this is a true joint ownership.

Now, to your question about tax implications. If the residential property was owned just by you and your wife, and it was your principal residence, there would be no tax anyway when the property was sold or transferred on your death. So you aren't avoiding any tax by adding your daughter's name.

If it's not your principal residence but is a second property such as a cabin, revenue property or simply a second family  home, then there is going to be capital gains tax on its sale or transfer (assuming that it increases in value) even if your daughter's name is on it.

Let's say that your daughter is single now but gets married, and she and her husband buy a home. You may one day decide to sell your house either because you want to move somewhere else or because you are going to live in a care facility. As your house won't be her principal residence, her share of the transaction will be taxable.

The best people to talk to about taxes are accountants. If you have a chance to discuss this transaction with an accountant, I think that would be a good idea.

145 comments:

  1. I find your blog so helpful, and see how many people unintentionally make lives of loved ones more complicated after they are gone. My ex bought house with his parents and a month latter he passed away. Our divorce had just gone through but we had not reached a settlement, still in courts. The estate belongs to my children but the trustee is my husbands father(not working well he sold properties for his benefit not in the best interest of the children.. long story). Our matrimonial home got passed on to me as the title was joint tenancy. Two questions: My ex bought house and everything in it was paid by my ex, but parents claim that he only had 1% share, and that is the value they used for probate purposes, he made all mortgage payments and paid all the bills for that house,he took out all his RRSP out to pay for the down-payment. What can I do? Can I ask the court that for the stability of the our children, I be allowed to keep the house and (my children 9&11) can have the 50% share in the house that I share with my children. the trustee wants our house sold, Estate has funds but they will be used to pay dept against the estate. I am in trail for divorce settlement in Sept. My children are benefits of his insurance(not part of estate) along with his parents, which he changed just 5 months before his death.

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  2. Your comment; "Now, to your question about tax implications. If the residential property was owned just by you and your wife, and it was your principal residence, there would be no tax anyway when the property was sold or transferred on your death. So you aren't avoiding any tax by adding your daughter's name."
    yes no sales tax but there is the point about probate "tax" which depending on the province can be large.

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    1. Probate taxes are relatively low compared to income taxes which is what a capital gain would be taxed. In NS probate taxes are 1.65% (over $100,000)...the lowest marginal income tax rate is in the low 20%...

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  3. Hi Lynne, I wonder if you can help me with my problem. I live in Toronto,ON. and I don't know if probate fees will apply to my wife, when I pass away. The house was bought under my name only, before I got married. The deed to the house is still under my name. I do have a will naming my wife as sole beneficiary. All our other assets are under joint ownership. Is the will good enough to avoid probate fees? Or do I have to change the deed to the house to joint ownership? The house was bought for $220 000, and is now worth about $500 000.

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    1. You are confused about what a will does. Having a will doesn't cause or avoid probate fees.

      If you own assets in your own name, yes, your wife will have to apply for probate before she can transfer the assets to herself. Having a will is going to make that 100% easier for her than if you didn't have a will, but it's not going to avoid probate fees.

      Having your home in joint names with your wife will avoid probate fees. However, remember that ownership of anything - particularly a large asset - is about more than fees when you die. Lots of things can happen while you're alive, including lawsuits, divorce, etc.

      Lynne

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    2. Thank you so much Lynn. Everything is a lot clearer now, and now I know what must be done.something I should have done years ago.

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  4. I do have a will naming my wife as sole beneficiary. All our other assets are under joint ownership. Is the will good enough to avoid probate fees? thank you for this information, it is helpful

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    1. The assets that are owned jointly will not be in the estate, and neither will the assets which name a beneficiary. Those will therefore not attract probate fees if your wife outlives you. As for whether the will is good enough to avoid probate fees, there is no way I could possibly know that. You said that you have no assets in your own name, so the odds that probate can be avoided are good. However, there are sometimes other reasons that wills end up in probate, such as a problem with the validity of the will, questions about unclear language, claims by other parties, etc.

      Lynne

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  5. Hi, my spouse and I co-own a house. Her brother wants her to co-sign on title for a rental property to which my spouse will have no beneficial interest. How would her co-signing with her brother affect our joint ownership in our personal property and could it put our assets at risk?

    Ps. I really like your article

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  6. I am on provincial disability in bc. I was living in ont, where I purchased a home. I became too ill to live alone in it any more so I came to live with my son in bc. I want to transfer ownership to my son because I am not allowed to have this property and not live in it. I have tried to sell it for a yr and a half. It is causing me problems with "the system" out here and aggravating my illness. How can I give this house to my son? cheaply?

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  7. I am a Canadian citizen who married and American, and my place of residence is in the USA. When my Mom modified her will after Dad passed, she was told that I could not be on title of her condo. Was she given correct information? Thanks for your very informative website! Kathy

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  8. Live in Toronto. Parents in 80s want to add siblings to home property title and do a trust agreement. Can we do this ourselves? As well if siblings not living at this resident does it become a capital gain once parents deceased?

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    1. I would never suggest that anyone but a lawyer draft a trust agreement. That's a bit like doing surgery on yourself - you have no idea of damage control.

      Lynne

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  9. Hi Lynn, I own a home mortgage free that I'd like to give to my parents as a gift. Would land transfer tax still be payable based on appraised value, or is it avoidable if I gift the property or sell it to them for $1 for example? Thanks kindly for your response, Paul.

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    1. Land transfer tax is on the value, not the price.

      Lynne

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  10. what if it is not for tax reasons but the transfer to JT is because the house was originally purchased for child (by the parent solely) and now the child is being added as a JT. Does the presumption of resulting trust still apply even though the parent (purchaser) never lived in the home occupied by the child?

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  11. Great blog Live in Toronto. Parents in 80s want to add siblings to home property title and do a trust agreement. Can we do this ourselves? As well if siblings not living at this resident does it become a capital gain once parents deceased.........

    Aspect 3 | Omnia Sheffield

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    1. I would never under any circumstances recommend that anyone write a trust without a lawyer.

      As to the capital gains tax, yes most likely it would be taxable for the children, on their portion of the gain.

      Lynne

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  12. My husband is in a similar position. His parents are 91 and 93. His mother (91) has recently passed away and we were advised by the funeral director to have her name removed from all titles. This isn't a problem. We are/were in the process of having her name removed from the title of their home and adding my husbands (only child) and our sons name onto the title. This also isn't a problem but not sure it is advisable as we and our son already own our own homes. What consequences would befall us when my father-in-law passes away and we inherit his house. We are concerned about capital gains when we sell the house which is inevitable as no one wants it.

    Thanks you for any help you can be for us.

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    1. I don't even know where to start. First of all, why are you taking legal advice from a funeral director?

      I am very concerned about what you've told me. First of all, you're speaking as if you and your husband are making decisions about who should be on this title, when it isn't your property. Nobody but your father in law should be dealing with his property. If he doesn't have capacity to do that, then nobody should touch his property without a Power of Attorney brought into effect, and even then, the POA is not allowed to put his or her own name on the assets.

      How does it benefit your father in law to have your husband's name on the title? And how on earth does it benefit him to have your son's name on the title? This is very concerning as the risk to your father in law is absolutely immense! He could lose his property due to any car accident, marital breakdown, or financial misfortune that happens to your husband or your son. I don't know why you keep saying it isn't a problem, because to me, it is.

      When you inherit the house - assuming your father in law still owns it and it hasn't been tied up or lost in a lawsuit - yes it will be taxable to you and to your son.

      If nobody wants the house, why did you put other people's names on it? To avoid probate? That isn't going to work. The presumption of resulting trust means the house is still in your father in law's estate, so all you've done is incurred fees and possibly taxes for no gain.

      Lynne

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  13. Hi There, I have a similar issue with the previous comment that I am hoping to get help on? I am an only child and about 2 years ago, my mom passed away. She was still paying partially for the principal residence her and my dad shared but she was separated and moved into a place she rented 5 years before her death. My father still lived there, however, after her death, my father got ill and moved into an assited living facility. We have not done anything with the home yet, however, we did renew the mortgage after my mom passed away and the mortgage is with my father and the estate of my mother. I have not changed land titles so it is still under my mom and dad. I am so confused as to what to do to avoid tax for my father and myself. Any suggestions would be much appreciated.

    Thanks so much:)

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    1. SInce your Mom has passed away, her name needs to come off the title, and that is a lot easier to do while your father is alive than after he has passes away. If your father is still able to make rational decisions, he can sign to take her name off the title, or he can sign an enduring power of attorney to allow you to do it. If your father owns it and it's available to him to live in, it's most likely still is principal residence and will not be taxed when his name comes off (due to sale or his death). However, whenever you have an issue that's about tax, your safest bet is to consult an accountant. They know the most about tax, and whatever fee you pay will be worth the savings, and the peace of mind.

      Lynne

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  14. Thank you for your post. I recently bought a house in Canberra, Australia, and had heard that it was a good idea to add his name to the title just in case anything happened to me and my wife. I honestly never thought that if my child were to get divorced or sued that his wife would have any claim to our house. I'm glad I read this before making my decision.

    www.kjblaw.com.au

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    1. I'm glad you did, too. That's the problem with people "hearing" things - you only hear part of it, and not the whole story. I love it when people do their research before taking major financial steps!

      Lynne

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  15. Who do i contact if i'm living in Toronto and i need to remove my wife's name off our deed due to her passing.

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    1. Hi Michael,
      This link lists the land registries in the Toronto area. Pick the one closest to the land in question: http://www.ontario.ca/page/land-registry-offices-lro

      Lynne

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  16. Hi Lynne. My mom is 90 years old and in a nursing home. My Dad passed away 15 years ago. Brother took over house and POA . He owns half the house, helped to pay mortgage off many, many years ago. House is worth 1-2 million dollar now. .Recently another brother moved in after getting divorced so he could pay his alimony and child support payment (2 daughters). I m suspecting title of house in his name also and Moms taken off. What should I do? Strained relations with both brothers and 2 sisters that strangely enough don't seem to care.

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    1. The best place to start is with a title search to the house. That way you'll at least have the facts. If it turns out that your brother using the POA has taken your mother's name off the house, you may well have a lawsuit on your hands.

      Lynne

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    2. Hi Lynne, thanks for your reply. I took your advice and did title search. I found out that title was transferred in 2001 to second brother. I wasn't aware of this! Then his name was taken off during his separation/divorce in 2011. It was then gifted to second brother again in May 2015 "with natural love and affection". The oldest brother has hated me since the day I was born. He's 16 years older than me. He has always favoured the brother he took in. (he's 3 years older than me) They both refuse to discuss anything with me and are ignoring me. (I've had many arguments with oldest brother in past; he mentally abused me as a child). Mom and Dad separated in 1989, I was sole caregiver to Dad 9 years before he passed, and unaware that his name was never on house (since 1969). Oldest brother was POA to Dad's bank account. I never asked if he had a will and was never told anything. I don;t even know if he died penniless! I was full of sadness as I was very close to him. Why are they being so secretive with parent's financial affairs. Both sisters refuse to get involved. I feel there is a conspiracy against me. Any advice would be helpful, just to know if I have a strong case.

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    3. I'm not sure what strong case you mean. I think what you need and want is information. I don't mean to put words in your mouth but that's my interpretation. Is it your Dad's estate you're concerned about, or your mother's current situation? This is getting pretty complicated for a blog post, and you may end up hiring a lawyer to help you get information.

      Lynne

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  17. My elderly parents own their home in Vancouver. I am the only child and on their will to inherit the home should they both pass away. I am divorced, and do not live in their home and in consumer proposal for the next 5 yrs. I am worried about having to pay the GST or any other taxes on the value of the home (which is about $1 million) when I inherit it. Should I have my name added to the land title to avoid paying them? Any advice would be very helpful.

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    1. Are you allowed to own a million dollar property while you are in the middle of a consumer proposal? Maybe talk to the agency doing your proposal before you even consider that move.

      I have to admit, I heaved a heavy sigh when I read your question because it seems that everyone keeps asking if the kids should be on the title. No, they shouldn't. Who on earth is advising people to even think about doing this?

      It just seems crazy to me that someone -such as your parents - would risk losing a million dollar home just to POSSIBLY avoid paying GST on a transaction at some future time.

      There is no capital gains tax on the property when your parents pass away. If there is GST, it should be paid from their estate, not by you.

      Lynne

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  18. My mother sold her house and paid off all her debt and bought a new house in which the agreement was that my husband and I pay the remaining mortgage (in her name, I am the guarantor) and all the bills, excluding the property taxes. She would pay those. The deed is only in her name. She has not met the agreement, where we have, and is now threatening to sell the house, and not give us the opportunity to buy our family dwelling. Do we have a leg to stand on? I do not want to leave this home, and have already taken on her debt twice previously. Anything I can do to try to keep this house?

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  19. My husband bought a home with his dad before our marriage, him with 99% ownership and his dad 1%. My husband's primary residence is another home. My husband pays for the mortgage of the investment home. Say if we were to get a divorce, do I get any share of the investment home? Thanks.

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  20. This comment has been removed by a blog administrator.

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  21. My mom owns her condonimum and only her name is on the deed. My two sisters have power of attorney. My mom's lawyer is advising my two 2 siblings to have their name included on the deed to avoid a lengthy and costly court procedure to sell the property once my mom is deceased. After reading the above comments and responses i am concerned about this recommendation and wondering if my siblings should proceed with the lawyer's recommendation?
    Thanks

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    1. I don't know why there would have to be a court procedure to sell the house once your Mom passes away, particularly not a "lengthy and costly" one.

      Does your mother have a will? Maybe the lawyer is talking about not having to apply to the court for probate or administration? If he is, I think this is the worst advice ever. For one thing, getting probate is not lengthy. And it's not especially costly. Also, when kids' names are added to the property to avoid probate, the property is still in the estate anyway so it doesn't even work.

      That's not even getting into the problems with someone acting under a POA transferring property to themselves.

      The only way I can make sense of this situation is to assume that the lawyer involved knows something I don't, because on the facts you've given here, I don't agree with his advice.

      Lynne

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    2. Exactly...I received a grant of probate in about 4 days (application filed by a lawyer).

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  22. House and vehicles are in both my husband's and my name. Credit card in my name alone. Can I will my half of vehicles/house to my kids? If I have no or little money when I die, do my kids need to pay off my debt? If they are allowed to have half the joint assets are they to be sold to satisfy the debt? If that's the case, what would happen to my husband? Thank you

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    1. You really have a lot of questions, and I hope you'll spend some time searching articles on this blog to help answer some of them. You're basically asking me for a full estate planning consultation, which is beyond the scope of a blog post answer.

      If you and your husband are joint owners of your house, there is no "half" to give to anyone. Joint ownership comes with a right of survivorship which means when you die, he automatically owns the whole house (and vice versa). It doesn't matter what you say in your will; your will can't change that.

      If you own as tenants-in-common, which is extremely rare for married couples, then you can leave your half of the house to the kids.

      Please remember that there is a huge difference between what you CAN legally do and what you SHOULD do. In this post, I'm simply answering your question about whether you can.

      If you have very little money when you pass away, your family will have to use your estate to pay the debts to the extent that it can. Yes, this could mean selling assets to pay debts. They will not have to use their own money to pay them, though.

      It appears that you wish to by-pass your husband and leave your assets to your children. That's not so easy to do, as every province has laws saying that if a spouse is not properly looked after in a will, he or she can ask the court to change the estate distribution to give them more.

      You should probably find a lawyer close to you to sit down with and talk over your options.

      Lynne

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  23. Hi Lynne
    we have just put my mom in a retirement home and sold her house this year. My question is she owns a cottage and what's to add my name to the deed. I am the only child and sister and father have passed. will she have to pay capital gains if she adds my name? We do not plan to sell the cottage.

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    1. Since your mother has sold her house, the cabin appears to be the only real estate she now owns. She can now designate the cottage as her principal residence (since I'm not an accountant, check with one, or look at the Canada Revenue Agency website to ensure the property is eligible).

      Assuming that she can designate the cottage as her principal residence, her estate wouldn't pay any capital gains tax when she passes away.

      However, if she does add your name to the deed, you might pay taxes yourself when she passes away, unless the cottage is also your principal residence. Only her half would be tax-free. If you already own a home, adding your name to the deed may be creating a new tax issue that currently doesn't exist.

      One more thing to note: when your sister passed away, did she leave children? If so, they are likely the beneficiaries of your mother's estate as well. If so, adding your name to the cottage deed will not keep it out of probate.

      Lynne

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  24. Hi Lynne,

    What is the least expensive way to remove my name from my parent's property?

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  25. Hi Lynne,
    What a great blog. My parents own 3 homes. 1 is there principle residence and the other two are income properties. They have stated that one property is for me and the other for my brother--all properties have been paid for in full since the 1980's.

    When I got married, we moved into the property that was meant for me and have lived here for 6 years. We intend to stay here and move when we grow out of it. However, my parents never put either my brother or I on the titles to the two houses...a decision they now regret. They want to give me the house but they can't afford to without selling it to pay for the capit. gains tax...we don't want to sell the house because we aren't ready to move yet. If my parents put me on the title, will this solve the problem? Can they put me on and remove themselves or do all three of us need to stay on the title? If all three are on the title, what happens when we sell--it is our principle residence but not my parents. Thank you.

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    1. First of all, I have to correct you on one thing - the house is not your principal residence. You may live there, but if you don't own it, it does not qualify as your principal residence.

      If your parents add you to the property now, the capital gain tax will be triggered now. This is because it's a transaction from A (your parents) to B (your parents and you) when A's property has gained in value. So, no it won't solve the problem.

      You said that your parents regret not adding you to the property title, but they shouldn't regret it. If they had added you, and you had gotten a divorce or been sued, they'd have lost the property. They made the best decision they could in the circumstances.

      Lynne

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  26. My step sister moved in with my step father so that she could take care of him. She has a full time job, pays no rent, but buys groceries for both of them. The house is in his name only and I realize that the property will be part of his estate when he dies, unless he sells it first. However, my step sister thinks that she will be entitled to stay and assume ownership of the property. Should there be an agreement signed by him now stating that she cannot do that?

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    1. First, your father needs a will that deals with his estate.

      Second, why does your step-sister think that she'll get the house? Is it because she assumes she knows the law, or because your father has said something to lead her to believe that? He needs to have a conversation with her about this. He may not wish to, if he is worried about her moving out and being left with nobody to care for him, but it is essential.

      I've never heard of an agreement whereby someone agrees NOT to get an inheritance they were never entitled to get in the first place. However, what about an agreement that sets out the terms of her care? She agrees to spend a certain number of hours, or do certain tasks, and in return she lives rent free. If set up properly, that agreement could be used to ensure that she knows she is not receiving the house as payment for her care.

      Lynne

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  27. Hi Lynne,
    I was going through your blog and I happened to stumble upon this post. My mother is going through the same dilemma as to whether she should add mine and my 2 other siblings name on title. We live in Vancouver and our house is worth around 1 million now. I was just wondering if you could list the pro's and the con's of adding your children's names to a title? Thank you in advance for your advice.

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    1. Hi. I answered your question with a new blog post. Here is the link: http://estatelawcanada.blogspot.ca/2016/01/pros-and-cons-of-adding-kids-to-title.html.

      Lynne

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  28. Hi Lynne. I am the sole beneficiary and trustee of my mothers estate and she did not put my name on the deed/title of the house. the house now has to go through probate. I plan to sell it right away. If the house is worth 1.5 million, does that mean i have to pay 5% GST, or $75,000 in taxes when i sell? Also, what is the rate of taxation on RRIFs? she had aboutn $200,000 in RRIFS. And, what are probate fees and how much are they? thank you

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    1. Hi Barb,
      If you're selling the house, the purchaser pays GST, not you.

      I don't know what the rate of tax would be on a RRIF. You'd have to ask a financial advisor, or banker, not a lawyer.

      Probate fees vary widely from province to province. I'M going to guess that you're in Alberta, given the 5% GST you mentioned. The fees have recently increased there, and the fee on an estate of the size you've mentioned would be $550.

      Lynne

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  29. Hi Lynne!

    My single daughter is selling her primary residence. My spouse & I would like to buy it, in co-ownership with our single son, who would be living there as his primary residence. My spouse and I have our own residence and therefore won't be living there. Do you see any major pitfalls in such a transaction? Thank you!

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    1. Well, I'm a wills and estates lawyer, so I have nothing to say about things like how the transaction might impact property division on marriage breakdown etc. I can only comment on issues that relate to the estate planning side of things.

      Assuming that the three of you buy this house together and you live elsewhere, your portion of the house is subject to capital gains. Therefore, when your son sells the house in the future, you and your spouse will have to pay tax on your share of the increase in value. Whether or not you see that as a "major pitfall" is up to you.

      Lynne

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    2. Thanks for the input. It is much appreciated. And no, I do not see the taxes as a major pitfall. If we do go on with this, we'll make the necessary provisions for taxes.

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  30. This is for your joint tenancy vs tenancy in common thread. If you have 3 people all owning equal 1/3 shares to a property in a tenancy in common can a 1/3 share will their portion to someone who is mentally handicapped? Or to more than one person?

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    1. Yes, a person who owns part of a house in tenancy in common can dispose of that share of the house as he or she wishes. It can be to more than one person, though it seems to me that the more people you have on a title, the worse the situation gets. I honestly can't see the upside in having a list of owners on one single house.

      Eventually there is a limit on how many names can legally be put on one title as well.

      Transferring to a mentally handicapped person, but you will be dealing with his or her trustee or power of attorney. Also, before you transfer assets to a mentally disabled person, find out whether doing so is going to result in the person being bumped off provincial disability benefits. They can lose their benefits - and not just the monthly payment but medical coverage as well - by owning more assets than allowed by law. So be careful that you're not doing more harm than good.

      Lynne

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  31. Hi Lynne
    Found your webpage and love it. You have great articles and lots of wisdom to share; thank you!

    I wanted to ask for some guidance regarding my widowed aunt. She's trying to "be nice" when dealing with her husband's will, but i am concerned she will be left in a vulnerable situation. (she already is!)

    Here is the background of the situation. My aunt and uncle were married over 50 years were not able to have children of their own. As a result they were especially generous to family in Europe to make their lives a little easier due to their economic situations. Approximately 20 years ago my uncle was influenced by anothers brilliant idea to protect his "half" of the house (for "his family" in europe)because he was told that since you don't have kids and you are older than your wife she will give everything to "her" family. Yes, it was terrible advice because my aunt is the most generous person on both sides of the family.

    They sold that property approx ten years ago and remained "tenants in common" in their new home. The money earned from the last property was put into a joint investment. Fast forward seven years. My uncle passed away and we learned from my aunt that my uncle left a will with 2 nephews as executors and half of everything to his eleven nieces and nephews. Two are in Canada and nine in Europe. Its been over three years since my uncle passed away and things are not resolved.

    She is not comfortable dealing with the emotional side of changing or strained relationships in her older years. We have suggested she needs a strong estate lawyer and professional advice, not the "advice from the everything but the kitchen sink lawyer"!! She has been told that she must split the house value, but her joint investments are off limits. she said someone told her that a lawyer could help her so she could get to keep he house and joint investments. I understand the will has not gone to probate. Isn't there a time limit on that? Help! Any wisdom or guidance is appreciated.

    ReplyDelete
    Replies
    1. I'm sorry to hear that things are so tough on your aunt. It's really hard to know who to listen to when you're already overwhelmed. She currently has too many people "advising" her.

      Has your aunt thought of going to a trust company? She can hire one to do the work on the estate so that she doesn't have to do the actual leg work. They will deal with the beneficiaries and the assets, but your aunt will remain the executor so she'll retain control. They'll charge a percentage of the estate (about 4 1/2 or less) but they don't charge by the hour. This would certainly take a lot of the work off her, and provide her with a buffer between her and the strained relationships.

      If she does decide to work just with a lawyer, I completely agree about getting someone who specializes, if at all possible. Just like doctors, lawyers build up expertise in certain areas.

      There is no specific time limit on taking a will to probate, except for the rights of the beneficiaries to have an estate dealt with in reasonable time.

      Lynne

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  32. Lynne, thank you! So if i understand you the will of my uncle leaving his half of the house can not be "contested" (don't know if that is the proper term). Are the also entitled to 1/2 of their investments even though it is under a joint account?

    You also indicate that my aunt should consider a trust company. She is not the executor or beneficiary of my uncles will. Is this for her will? How does she then become the executor? Sorry a little confused :(

    Thanks again Lynne for your kind assistance.

    ReplyDelete
    Replies
    1. When I read your original note, I thought you meant that your aunt was the executor, since you were talking about how she had to deal with everything and everyone, and how she needed a lawyer.

      Lynne

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  33. Dear Lynne,

    First of all, I want to thank you for creating such an informative blog.

    Suppose I buy a property with my parents with only 1% equity on the title of the house, does that mean my spouse can claim half of the house if we were to get divorced?

    Wouldn't that be illogical though? How can she claim 50% of the house if my total equity in the house is only 1%?

    Is there a way to avoid this risk for my parents while retaining title because I want to help my parents buy the house? Without my income, they would not be able to buy the house. So, I want to retain the 1% title only to enable them to buy the house and pay off the mortgage. I also want to use my RRSP as the first-time home buyer to purchase the house for them.

    Thanks.

    ReplyDelete
  34. Hello Lynne,
    Great web site!!!!

    I have two houses, one as my primary residence and a newly built one. I want to give the newly build one to my daughter and have her assume a very small amount of mortgage that is on it. So basically having the house as her primary residence and start building her life moving forward.

    My question is: Do I have to pay capital gain if I put her on the title as a sole owner and remove myself from the title?
    Thanks!
    Al

    ReplyDelete
    Replies
    1. Based on the facts you've presented, yes you would be subject to capital gains tax. This tax arises on the disposal of capital property other than your principal residence. It doesn't matter whether the disposal is done by sale, gift, or will. It's still you disposing of the property. That's the general rule. I'm not an accountant so I'm not going to talk about ways to try to get around it. It might be worth your while to discuss your specific situation with a tax accountant.

      Lynne

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  35. HI Lynne,

    I bought a house with my son in ownership of 50/50 for him is first house and for me is my second house, he lives there paying all bills , my question is if we sell the house and will make profit how will be taxed the capital gain ?
    My son won't pay any tax being his principal residence but myself I need to pay the tax on capital gain ? how to calculate ?

    Thank you in advance,

    Dragos

    ReplyDelete
    Replies
    1. I need a home equity loan but am currently unemployed. Can I just add my sister to the title of my home to get such a loan?

      Delete
    2. Not being a banker, I have no idea.

      Lynne

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    3. Hi Dragos,
      If you and your son sold the house, his half is not taxable. Yours is, because it's not your principal residence.

      To calculate a ballpark figure, take the fair market value of the property now and subtract the amount you and your son paid for the house. Whatever is left is the gain. Half of that gain is yours. Half of your gain is taxable. (So, you divide by half twice). The amount that is left goes on your tax return for the year of sale.

      Example:
      House now is worth $200,000. Was purchased for 100,000. The gain is 100,000. Half of that is his, and half yours, so your half of the gain is 50,000. Only half of the gain is taxable, so half of $50,000 is 25,000.

      Lynne

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  36. How easy is it to add someone to the title of my house? Can it be done at anytime or is this a question that I should be asking a bank? Thanks!

    ReplyDelete
    Replies
    1. Unfortunately, it's really easy to add someone to the title of your house. I say "unfortunately" because the ease of the transaction misleads people, such as you, into thinking it's less of a big deal than it really is. Remember that if you add someone, you can't take them off again. It will no longer be just yours.

      Putting them on is easy. Getting them off again is not.

      Lynne

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  37. My parents jointly own a rental property. With my dad recently passing away, his 50% share automatically transfers to my mom. In order to utilize his cumulative capital losses effectively, it is preferable to transfer my dad's 50% interest to my mom at FMV. Will we need to recapture depreciation, or can this recapture be deferred until the property is actually sold?

    ReplyDelete
    Replies
    1. I'm afraid you're going to have to ask an accountant that question.

      Lynne

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  38. My father passed 10 years ago and I believe his name along with my mother's is on the deed to the home. Should my mother remove his name? She has a will that shares 50/50 of her estate with my brother when she passes.

    ReplyDelete
    Replies
    1. Yes, your mother definitely should remove your father's name from the title. It's something that's easy and inexpensive to do while she is alive. It doesn't need court involvement since all she has to do is take his death certificate to the local land registry and have the title changed. However if she passes away while his name is still on the title, her executor will have to probate not just her will but your father's as well just to remove your father's name.

      Lynne

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  39. Dear Lynne,

    I have a question.i and my wife own a house which is our primary residence and we purchased second house under our names to help our married daughter with 2 children and husband as temporary shelter until both kids go to school and she can start working. Her husband is working. The plan is that they will move out and buy their own house with a little bit of help from US and husband parents. What happens if then we sell our primary residence and move to this second house? The second house would become our primary residence. Are there any tax implications?

    Thank you!

    Marco

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    Replies
    1. Hi Marco,
      I'm not an accountant, but I can tell you how the general rules operate. You can sell your principal residence, the one you live in, with no tax consequences. Then when you move into the other one, that can be your new principal residence. You can only have one principal residence at a time, but you can have a new one when one is sold. As far as I know, there should be no tax consequences.

      Lynne

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    2. Thank you very much Lynne!
      This is great news for me. Should I consult your answer with some tax authorities like CRA? I just want to be sure that this way I will avoid capital gain tax as values of properties went up. Please advise. And thanks again.

      Marco

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  40. Hi Lynne!
    I am a single mum with 2 boys age 21 and 19. My husband passed away 14 years ago. My eldest and I have put our pay slips together with a deposit and we are now approved for a mortgage to buy our first home in Sydney. My youngest is looking for a full time job. What is the best way to include him in the title? He is happy to participate and I intend prepare them both for the future. Note: I have no plan to remarry or have a partner. I just want them equally happy as they get on really well.
    Thank you in advance!

    ReplyDelete
    Replies
    1. Actually, I'd stop and think about the wisdom of adding your younger son to the title. I can see why you've added the older one, as you're combining resources to purchase the house. But I don't see why you'd add the younger one. You all may live together now, but given the ages of your sons, that is going to change in the next few years. Once the younger one moves out and gets his own place, you've created a tax issue. For example, if you and your older son sell the house and the younger one has his own, his portion of your house will be taxable.

      Also consider that the more people you have on the title, the more risk there is. You and your older son could lose your house if any of you - including the younger son - should be sued e.g. due to a car accident.

      If both of their names are on the title and you pass away, you leave two sons in one house. As I said, it's not realistic to think that they are going to live together in that house forever so one is going to have to buy out the other.

      It just seems to add complications for very little gain.

      Lynne

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  41. Dear Lynne, My principal residence since 2006 has been a townhouse in B.C. that my father bought his money, to which he paid in full at the time of purchase in 2006 with both of our names being on title 50/50, to which has never been his principal residence (as he owns his own house as well as another house/rental property). Since the townhouse purchase (in 2006),I have paid all property taxes, strata fees & special assessments. In 2010 he removed himself from title & now the deed is only in my name as he gifted the townhouse to me "with natural love & affection". Now my dad wants to sell the townhouse (due to it's increased value) with all proceeds of the sale going directly to him, as he says the townhouse is part of his estate regardless of him no longer being on title. My question is if he can legally do this (sell &/or sue me to sell the townhouse) with my name on solely on title?, & if not, am I legally obligated to pay him the proceeds of the sale when &/or if I ever do decide to sell?. Thank you & I look forward to your reply.

    ReplyDelete
  42. Dear Lynne,
    Thank you for your advice always.
    From reading the above messages, it appears that it has little or none benefits in adding your sons' names/titles of your home. I also have two sons from my pervious marriage and thinking to do the same thing. Now that I learn that it is not a good idea, I will probably give up this idea now. Secondly, my husband and I married 10 years ago and had a will drawn by a lawyer at that time and my husband's adult daughter (from his first marriage)was in a very difficult relationship with her dad at that time and we still put down to give her a fair share of our estate(when we both passed on.) Since then, she has become estranged with her father in the past 7 years. They hardly talk to each other. Now we are thinking to add an amendment to our existing will and only to give her a very small amount if we both passed on. Will she be able to challenge that or the previous will has more power than the amendment?(? causidal?- not sure if that what you call it in a legal term.) This is to state that his daughter simply does not deserve much for the way she is treating my husband.
    Is there anything my husband's family or her daughter can do when my husband passed on? Right now, I am the only beneficiary for the estate if my husband passed on before me. Will I be able to change the will or revise the will my husband and I made 10 years ago after his death? Should we do this before he passed on?
    You advice is very much appreciated.

    Thank you Lynne for your time!

    ReplyDelete
    Replies
    1. If you made an amendment to the will (a codicil), it would have the same legal "power" as the will unless there was some suspicion around the codicil, such as your husband not having full mental capacity when the codicil was made.

      If you don't want the contents of the previous will known, you have the option of having a whole new will prepared. This assumes that your husband's mental capacity is still strong and you haven't mentioned otherwise.

      It is alright to give one child less than the others. You haven't said where you live, but this is harder to do in BC than in other provinces. Make sure the reason for the change are clear to the lawyer who drafts a codicil or a new will. He or she will take notes about the reasons which may be important if there is a will challenge. But more importantly, the lawyer may suggest that the will contain a line or two stating why this child is receiving less. She isn't the first child to be estranged from her parents, and I have seen many cases where a simple sentence in the will states that the relationship has deteriorated.

      Other people in your husband's family do not have any right to any part of his estate, based on the facts you've given me.

      Yes, you can change your will after your husband passes away.

      I don't like the idea of your husband having a will that doesn't actually express his wishes for his estate, so I'm not crazy about the plan of him dying first and then you changing the will.

      I hope this general information at least gives you food for thought, even though it is too general to be considered legal advice. If you need to discuss the case in detail, please call my office at 709-221-5511 and arrange a time for a phone consult. We charge $400 for a one-time consultation.

      Lynne

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    2. Thank you for your reply. Yes, my husband is in full mental capacity, still gainfully employed. The reason we wanted to have a codicil drawn is that his daughter is no longer a part of our life for a number of years now. We feel in order to reflect it in our will is to give her minimum that she deserves. By the way, how much do you charge for writing a codicil? Who can write the codicil? Can a JOP or accountant write one as we already have a properly written will 10 years ago by our lawyer. I appreciate your reply. Thanks

      Delete
    3. If your accountant writes wills or codicils for people, get a new accountant because the one you have must be an idiot to take on work he or she is not trained - or allowed - to do. Only lawyers (or paralegals working with lawyers) can prepare legal documents. Only lawyers can give legal advice, and you need to be advised about the pros and cons of your plans.

      I almost never write codicils, in fact I haven't written one for years, but when I do I charge the same as for a new will because it's pretty much the same amount of work. Why not go back to your lawyer, who would have the will on his or her computer? That would be just as easy and inexpensive.

      Lynne

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  43. Sorry for many typos as I wrote the above message in a hurry.

    ReplyDelete
  44. Hi Lynn

    I purchased my home 40 years ago and the title is in my name only. My first husband passed away and I have remarried.
    If I die before my current husband I would like him to be able to live in it until he passes and then for my three adult children to inherit (sell it and split the profit). I will be leaving my husband all my RRSPs. My husband is not related to my children so I don't want to will him the house because if he remarries my children may get nothing. Is it possible to arrange things this way?

    ReplyDelete
    Replies
    1. Yes, it is, and it's not all that unusual to do so with a blended family. You will have to hold your home in a trust that allows your husband to live there. Make sure this is written by an experienced lawyer. Make sure it is DETAILED and covers things like who is paying for property tax and insurance, what happens if he no longer wants to live there, etc.

      Also make sure you check into any rights that arise due to it being the matrimonial home. For example here in NL your husband would automatically inherit the house from you no matter what your will said. Make sure you know what rights he will have to your house.

      Lynne

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  45. Hi Lynne

    I own a home in Vancouver and the title is in my name only. My first husband died and I subsequenly remarried. If I die first, I will leave my current husband my RRSPs and I would like him to be able to continue to live in the house until he passes. After his death I want the house to be sold and the proceeds go to my three adult children.
    My husband has no legal relationship to my children and if he remarries they may end up with nothing; therefore, I don't want to will the house to him. Is it possible to arrange things this way?

    ReplyDelete
    Replies
    1. Yes. You will need a good, strong will prepared by someone who does a lot of wills. The house can be held in trust for your husband's lifetime. There will be details to be worked out such as who is paying for insurance and property tax, what happens if he goes to live in care, what if he wants to move, etc.

      I also suggest that you talk to your lawyer specifically about any special treatment of the matrimonial home that may arise as each province treats the home differently. In some places, there may be a right that needs to be waived, so be sure you are fully advised on that.

      Lynne

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  46. Dear Lynne,

    Not sure how long it would take you to answer my questions, it has been almost a month since I last wrote to you(since May 19th 2016). If you think my question is not important enough to deserve an answer, please give me a hint, I wont check back this blog anymore. sorry for writing again.

    ReplyDelete
    Replies
    1. I have never, in the history of this blog, decided not to answer a question because it was "not important enough". Most likely your question came in on a day that had a couple of dozen questions. When that happens, I start at the top of my inbox and do as many as I can within the time I have. I admit that I don't always get through them all. Other times, I'll notice that a post has some unanswered comments so I'll go there and answer as many as I can on that particular post.

      Sometimes I don't answer questions because I can tell that someone is just venting about something, and they don't really need an answer. Sometimes the questions I get are so cryptic I don't even know what I'm being asked. Other times the questions are way, way too complicated to be answered in a blog post.

      There is no need to apologize for writing again.

      Lynne

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  47. My father purchased a property in my name 16 years ago his will states of the property will be inherited by myself his wife and my brother. Can he legally will that property even if the property is in my name. My father and his wife both reside in that property to this day. The property has appreciated by 600,000 in that timeframe

    ReplyDelete
    Replies
    1. If you are the only owner of a property, nobody else can give it away. That's a general rule of course, and all general rules are open to attack. Was there ever any kind of bare trust signed? That would be a paper saying that your name is on it but you are just holding onto it for him? Did you and your father have any other sort of signed agreement about the property? Written agreements regarding land are not enforceable but written ones can change everything.

      If your father has been paying everything for the house, I would also be aware of the possibility of a lawsuit based on unjust enrichment, which basically means you've gained something at the expense of someone else. This only applies if the law sees your gain as unjust, and that is always based on the exact facts of a case.

      Lynne

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  48. Hi Lynn,
    Regarding the questions I posted on May 19th, I am still hoping you will answer me one day. Are my questions too complicated to answer on your blog or you don't understand my questions? Please reply. In fact, I find out the word is :codicil.
    Thanks

    ReplyDelete
    Replies
    1. Well, the thing about everyone using the posting name "anonymous" is that I don't know which question is yours. I keep up with as many as I can.

      Lynne

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  49. Never mind, Lynn. I know you are busy, however,I did specify in my message that my questions were posted on May 19th, only one posting on that day almost 6 weeks ago. Anyway, thanks for your time just the same! All the best!

    ReplyDelete
  50. Hi Lynne, Im new to your blog and I love it. I am the POA of property and Health for both of my Parents I have been living with for the past 10 years. My Parents had a Will drawn up recently stating this and an appointment Myself as Trustee to the Estate. My Father would like to add Myself to the Deed as a Permanent Resident which I guess gives me part owner ship of the House. My Question; I have 5 other siblings in which the Estate much be divided evenly in the event of my Parents passing will my Name on the Deed exclude the property from my Parents Estate?? It is My Fathers intention for the property to me mine, what are the steps he must take to ensure this without a lengthy Sibling dispute when My Parents have rested?? Thank You Lynn

    ReplyDelete
    Replies
    1. Hi Paulslick. Welcome aboard.

      I'm not familiar with adding someone to a deed as a permanent resident. I'm not sure whether that does give you ownership, or a life estate, or nothing.

      However, I'd like to answer your question about the ownership without getting bogged down in the name of the document. If your father signs a document that DOES add you to the title of the house, on his death the presumption in law will be that you have only been added as a trustee. The house would still be part of his estate. Your siblings would be entitled to rely on that presumption to ensure that they get a share of the house.

      If it is your father's wish that you are to inherit the house for yourself, he needs to create legal evidence to support that. Telling you isn't enough. Telling your siblings isn't enough.

      One of the most effective ways to do this is to confirm his intentions in his will. Now you said he just recently had a new will made so he might not want to do that over again. So, another possibility is a Memorandum to Trustee. That is basically a letter written to his executor (you) that your father would write to confirm his intentions. He could include his reasons for the gift if he wanted to but he doesn't have to. The letter would be stronger if witnessed (not by you). Then it should be sealed and kept with his will. After his passing you could show your siblings the letter.

      If you anticipate issues with the siblings (and who doesn't?) I suggest your father make things a little more formal. He could ask his will-drafting lawyer to create a very simple, 1-page document expressing his intentions. Then the lawyer could witness it. This is stronger because the lawyer will have a conversation with your dad to find out why he wants to do this, and to satisfy himself that your father is doing so voluntarily.

      Lynne

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    2. Thank you Lynne, your advice is very helpful perhaps i'll have him contact you if you're in the GTA..

      Delete
    3. No, I'm not in the GTA, though for some reason a lot of people make that assumption. After about 30 years in Alberta, I moved home 4 years ago to my beautiful island of Newfoundland.

      Lynne

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  51. My mother-in-law a few years ago signed her house over to one son. The son added his 2nd wife. Mom told us a few years later and he promised to look after her. When the opportunity came, he signed her into a senior residence, in a week had the house up for sale, mom was not even given an opportunity to return from the hospital and pick out what she wanted. The son did not give his mother any funds from the sale, he never contributed to the purchase or up keep. All proceeds went to him. Mom's new senior residence was costly and her savings she was going through quickly. In 2016, mom became hospitalized and no one knew what was coming next, my brother in law went on a "secret" no contact vacation with no specified date of return. He told us he had made peace and went to the funeral home to ask how long a body could be kept. My mother in law did recover, they advised the other son to move her to a nursing home. The son on vacation, turned out to be joint on his mother's account, so no one had access to set up auto debits and pay for moving expenses. The lawyer refused to issue the remaining son the PAs because they were also joint, two sons. It was about this time, we found the son on vacation had borrowed money from his mom's account, a down payment for his vacation, %15,000. Although he put it back, the money was gone for two weeks. When his brother confronted him, he could not see the issue, he actually thought his actions were fine. After his return from holidays, he visits his mom in a nursing home, which is dingy and not great looking and tells her all about his 3 to 4 week vacation, while she was laying on her possible death bed and not once phoning his brother to ask "how is mom?" The problem, if the son had died while mother was in the house, would his wife let her mother in law continue to live in the house, or would she be placed at the curb. When he borrowed from her account, would the money have been replaced? We also have no understanding of how mother was legally advised, she speaks little to no English, was she given independent legal advice and who interpreted, my brother in law? My mother in law, thought this son would look after her, now she struggles and the burden now falls on the son who knew nothing about the transactions. The two siblings now argue, with one not caring and the other one ashamed of his sibling's actions, their future, no relationship. The one who took the house and borrowed the money, now wants to wash his hands of his mother. Convenient he took all she had and is joint on her pension accounts. The only thing holding him, is the power of attorneys, both sons. When the other son asks about using the PA at the bank, the son that is joint keeps making up excuses that the bank will not recognize the PA, unless their mom is there. He has become a person we no longer recognize,and when he came back from holidays, found his mom had been moved, his concern was the TV he purchased with his mom's money. Please, read this before signing anything over to your children.

    ReplyDelete
    Replies
    1. It's a sad and disappointing story, to be sure. Even after all these years I am saddened and shocked at the way people treat their own parents. I appreciate you sharing your story.

      Lynne

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  52. Hello, I'm from Ontario. My husband decided to put the house into joint ownership with his daughter. In his will he's made a provision to let me remain in the house, or rent it out, for as long as I live.
    Is this even binding, since his daughter is joint owner? Can she do what she wants with the house, including asking me to leave? I was brought to his lawyers office, and was asked to sign papers. I didn't know there was an appt., or what it was about. I was caught off guard, and before I knew it, I had signed off on the house. I found out about the joint ownership, when I happened to see the property tax bill. I was floored! Your comments please.

    ReplyDelete
    Replies
    1. Nobody can make provisions in their will for property they don't own. If your husband and his daughter are joint owners, the minute he passes away, she owns the property by right of survivorship. So, no, he can't make any arrangements for what happens in the house. The daughter could legally ask you to leave.

      As for what you signed at the lawyer's office, I suspect it was a release of any matrimonial rights relating to the house, but that's just a guess.

      Lynne

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  53. Hi Lynne,

    Advice for route to consider plz. My mom passed last year after being ill. Before her passing, my parents together expressed their wishes to all of us at the same time regarding what will happen with their home after my father passes as well. The house, which is pretty much the entirety of their estate other than some material possessions, is to go to me. I currently live in the home with my children and father, allowing him to stay in his home (he would not be able to maintain it alone in his age).

    But, my siblings do not think it is "fair" for me to get the house, so much so that I've been warned a will would be contested by another sibling. As difficult as it is for them to accept, my parents did not make this decision lightly and they explained why they came to this decision to all of us together in a hope to avoid the conflict that has ensued since my mother's death. My defense of their decision is seen as self-serving, as I'm the one that benefits.

    My father is now considering adding me to the home in joint ownership. Would this adequately secure his wishes for me to inherit the house in conjunction with a will? With nothing else of note in his estate, would my siblings have grounds to contest as it wasn't divided fairly?

    We want to ensure that these things are dealt with now while he is in good health so that it doesn't cause stress and conflict later. How can my father ensure that my siblings can't mess things up if he becomes incapable or passes?

    ReplyDelete
  54. Hi Lynne

    I hope this doesn't post twice but I'm sure I messed up my first attempt so here goes again.

    My mother has the house solely in her name. Not sure why but her and dad made this change many years ago. Mom has told me that she wants to leave the house to me and split the remaining assets amongst my siblings. Her reasoning is that I am 60 yrs old, single, never married, have no children and she wants me to have my childhood home for my home one day and not worry anout me being able to afford rental prices into retirement. All my older siblings are long time home owners who have benefited from my parents throughout the years in financing for their home(s) in some manner. She is insistent this is her decision and what she wants to do. I'm grateful of course but unsure if it is the wisest decision or if it would even be possible. First, my father is in the house too. If my mother died first I would assume the matrimonial home would become his and then become a part of his estate to be shared amongst all of us children however he has decided in his will. If it was that I inherited the house some day would I, who works and lives (I have always been a renter) in another city within the same province, be able to deem the house my principal residence despite not living in it full time until I retire or if I decided to sell it one day and use the funds to purchase a home in the city I live in? Or would it automatically be a sale to me as a secondary residence triggerring a capital gain I could not afford? I'm seeking some knowledge because my mother has indicated she is going to alter her will. Of course her generosity brings me a great sense of security that I currently don't have but I'm inclined to thank her for caring about me after she's passed on but suggesting she would be wiser to include the house as part of the estate to be sold and divided amongst all of us in whichever manner she sets out in her will. Could I afford it if it isn't considered my PR by CRA? A few of my siblings might feel jilted. Also there is always the chance the house may need to be sold prior to either of my parents deaths and the funds used to help finance their care anyhow.

    ReplyDelete
    Replies
    1. Well, there are certainly pros and cons to every choice, and you seem to be well aware of them. However, I think you need clarification on one important point.

      When a house is transferred or sold to you, YOU do not pay capital gains tax. It doesn't matter if it's your principal residence or not. Capital gains tax is based on the ownership and usage of the SELLER, and it sounds as if it's your mom's principal residence anyway. So don't worry about affording to receive the house as there would be no tax to you at the time (there could be tax if you sell it later on but that's another issue).

      Lynne

      Delete
  55. Hi Lynne,

    My dad bought a house and added two daughters and one son(me) to the title at the time of purchase of the house. If one of us siblings got divorced, is the house at risk of 50% or 25% since there are 4 people who has title? Many thanks.

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  56. I ran across your site while I was doing some research and hope that you may be able to help. My father died a number of years ago and in his will he indicated that the house be sold and the monies split amongst myself and my siblings. The house has not been sold, and in fact, continues to be the home for some of my siblings because they can't afford to own/rent their own places. What steps can we take to continue to keep the family home? None of my siblings, myself included, want to sell the family home, but I would like to make sure that we're legally allowed to keep the home. What should we be doing? Any advice on this matter would be welcomed.

    ReplyDelete
    Replies
    1. If the will specifically directed that the house be sold and the money split, that is the only legal thing the executor can do with it. The executor cannot choose to keep the house. However, if all of the beneficiaries sign a written agreement that they agree that the house should not be sold, then it can be kept.

      Now, before you go ahead and do that, let me ask you something. Why do you think that several siblings can own a house together for a long period of time? This has never worked and probably never will. What happens when one of you dies? You know that if you all own the house there will be nothing to give to the kids of the person who dies, right? What if those who live there but can't afford the maintenance and tax stop paying? Will those who don't live there be happy to pay instead? Why would they do that when they know they are never going to see a cent from the house unless ALL of their siblings die first?

      I think you are all being incredibly naive. Just sell the house and those who can't afford to buy one can use their share of the money for a down payment.

      Lynne

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    2. Cause they're not spoiled brat Western Canadians most likely.

      All these petty Anglo-family squabbles don't afflict many immigrant families that actully work together in maintainin and keeping a home. You can tell you only deal with clients who have white privilege and can afford to actually have these stupid arguments over who gets what share of the family home.

      Delete
    3. Andrusz, I would appreciate it if you would keep such foolish remarks about race off my blog. You're introducing a nasty element of belligerence that has no place here. Over the years, I have had clients of every race.

      Arguing over who gets what is in no way limited to those who have a lot to fight over. Many families fight over things with no dollar value at all. You may feel morally superior to those who fight over estates if you wish, but don't kid yourself that it's only the wealthy who go down that road.

      And yes, some immigrant families do fight over the family home. The world is not so simple that you can say that all members of any given group always behave in a particular manner. I don't know why you're so bitter but it sounds as if you regret your family's move to Canada.

      As for being "spoiled brat Western Canadians"...I (and therefore my clients) live 4,000 miles from western Canada.

      Lynne

      Delete
  57. Hello, I just happened on this blog, and after reading many of the comments I am wishing to understand the impact of joint ownership to me and my siblings as heirs. I am the executor of my mothers will and a few years back my name was added as joint owner of her primary residence. I currently own my own home so I am now assuming that I will be paying Capital Gains on the sale of the house in the event of my Mothers passing. I have 3 siblings so the sale of the home will be split 4 ways, however now, I am wondering if I would be better off having my name removed from ownership to avoid the capital gains.. One downside of doing this appears to be that the home will have to be kept and maintained for at least a year until the probate situation gets settled, which in itself is a risk. Is my thinking on the right track? Thanks in advance for any advice.

    ReplyDelete
    Replies
    1. You know, it's funny how people talk about adding and removing names from a title as if it were nothing more than sewing your name label into your t-shirt. Every time a name is "added" to a title, new rights of ownership are created along with new legal responsibilities.

      Yes, you will pay capital gains tax if your mother passes away. You will also pay them if you remove your name from it because that is also considered a sale of the property (sale from you/mom/siblings to mom/siblings). So you won't get around it that way.

      The home will have to be kept and maintained until probate is issued whether or not your name is on it. I suspect your mother thought that "adding" you was a convenient way to avoid probate, but as you have discovered from reading this blog, she is wrong about that. If she passes away while your name is on as joint owner, you have to hold the property in trust for the estate anyway.

      Lynne

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  58. Hi Lynne,

    Thanks so much for this awesome blog.This question has less to do with estate and more just joint ownership. If this is not the best thread to be asking this please direct me as needed.
    My parents will be bringing me and my wife on title before we endeavor to develop the land (splitting in two). I understand that since it is their principal residence any adjustment to the ownership/title will not be taxed (except I assume for property transfer tax, but I'm not sure the specific BC rules). The reason they are bringing us on title first is to avoid capital gains from selling (giving) part the subdivided property to us, since it would not be their primary residence.
    Once all is said an done we will own one part and they will own the other separately. It just occurred to me that my wife and I will have to pay property gains tax when we remove our names from my parents half (not our primary residence) but it wont be very much since within this time frame the property wont have gained very much.
    Does this all make sense? Again less to do with dying, more to do with joint ownership and tax implications.
    Thanks

    ReplyDelete
  59. I am 63 years old and have lived with my mother and father in their house for 63 years. It's the same house for 63 years. My father died about 40 years ago and just my mother and I have lived here. The house is in my mothers name. I will be staying on if she dies. She is 91. Should my name be added on to the title? I have not much money to pay any capital gain.

    ReplyDelete
    Replies
    1. Hi Gail.
      When your mother passes away, there will be no capital gains tax on the property. I'm assuming it's her principal residence when I say that.

      You haven't said whether you have siblings. If you do have siblings, just leave the title as it is. There would be no advantage to putting your name or anyone else's name on it.

      If you do not have siblings, your mother could think about adding you, but I don't actually see the advantage in doing so. Adding you will not improve the tax situation since there is no tax payable. There is always risk to a parent when a child is added to the title because things that happen to the child can affect the parent's finances. For example, you could be in a car accident and be sued for more than your insurance covers, and in that case your mother could lose her house in your lawsuit.

      Is it to avoid probate fees? That's the only possible upside I can think of. Other than that, I don't see any reason to even consider adding your name.

      Lynne

      Delete
  60. Hi Lynne,

    I am from AB,Canada. we both rent a house ( 2 bed rooms, two kids rooms, living room , kitchen etc)when we were in a relationship, because of my job i have to moved different city with in Alberta but not split as she was pregnant with my 8 months girl child. later i buy same house with 20% down payment ( i paid everything)just 3 weeks after our kid born and one month later we broke-up.

    I love kids and for the future of our girl child and her second girl kid from her ex-boy friend. I decide to let her stay in same house ( because she had bad repo as a tenant in that town). we both decided she will pay me small amount ( $450) as a rent and i will pay house insurance, property tax etc. until she got her new place. she will be sharing this big house with other tenant in future. so that i can cover mortgage.

    I pay child support ( more than the amount asked by the child support worker).

    Main factor in our break-up was her 2nd ex-boy friend who came back to town after almost one year of exile. who regularly visit her when i was not in town before break-up.

    its almost 3 month since we broke-up. she never letting me give other part of the house on rent. each time new tenant comes she creates issue that make new tenant move immediately.

    during my last visit to the house in found shocking things, her Ex was staying in my property, making renovations and replacing house hold assets without my consent.

    When i asked about all these things she threaten me to write same house on her name or she will take me to court to get this house on her name.

    I helped her at every step but now she wants that house which is not acceptable to me at all whatsoever reason.

    I want her to move out of that house i can help her in this process but will not give this house.

    I am thinking of transfering this house to my 8 year son instead losing it in court.

    please advise what is best in this situation i can do.

    thanks

    ReplyDelete
  61. Hello I have a situation I'm in currently. I put my house for sale it was still on market. My parents purchased another property for me there names r on title of the property. I knocked the house down and paid for all the building costs out of my own pocket. Now a year later after living in the house we r going to transfer the title from my parents name to me and my wife but are wondering cause value of house has gone up drastically and could be hit with be capital gains. Is there anything we can do. Can we get agreement made up that property was intended for me and avoid any tax penalties. Thanks

    ReplyDelete
    Replies
    1. I think an accountant might be able to help you with this question.

      Lynne

      Delete
  62. You are so right about the death of the child who is married. I saw it happen. A widow I knew lost her home when she had put in her married daughter's name who then got married and died. The now new husband claimed ownership and sold the property and kept all for himself. The widow was left homeless with no family and no home-moved into government housing.

    ReplyDelete
    Replies
    1. That's terrible. I really wish people would stop adding their kids' names to their property. They just don't realize the legal rights they are creating.

      Lynne

      Delete
  63. I am a co-executor and one of 4 residual beneficiaries to my mother's estate. Over twenty years ago, my folks gave me money to go towards the down payment of my first house. A year later I told them I would like to pay it back when I could. We wrote and signed a note (no witnesses and I never had a copy of the note) which said I would pay the money back. Two years later I lost my job and had almost ten years with no or little income. So my folks told me not to worry about paying it back. They asked me instead to stipulate in my will that if I predeceased them the amount would be given to them and this is what is stated in my will. There is no mention of the gift in either of their wills (my father predeceased my mother). My coexecutor has found the original note and feels that the amount should be taken out of the amount I am inheriting. You have blogged that loans given to a beneficiary when the deceased was alive should be deducted from the amount they inherit, however does that apply in this case since my folks and I had subsequently agreed on otherwise?

    Also, my coexecutor has paid one of my siblings, out of my mothers estate, for expenses incurred by her family to attend the funeral. Is this appropriate?

    My three siblings and I had powers of attorney for my mom. Just before she passed away, my siblings asked me to travel to be with her -originally it was to help her move into a senior's residence. She was admitted to hospital just a few days before I arrived and passed away shortly afterwards. The cost to fly was high (it was just before Christmas) and it was agreed that I would be reimbursed for my travel costs. My coexecutor says now that I should not expect to be reimbursed. I should note that I carried out executor duties while there including meeting three times with the funeral home (my coexecutor did not) and making other funeral arrangements. After the funeral I stayed behind, in part to not incur higher costs to my moms estate and to also meet with her bank. We have decided not take a fee for our executor duties but will have our expenses paid. Is it not reasonable for me to expect to be reimbursed for these expenses? Thanks

    ReplyDelete
  64. Hello,

    My Father is the sole owner of our home and he is 75. I am the eldest son of 2 and my brother and I live at home in the house and help pay for the mortgage and second private mortgage.

    We are concerned that if my Father passes away that whoever has liens on the house and forcibly evict us in order to pay off my Dad's personal debts. Would adding our names to the house prevent this? And would we simply inherit his debt as our own? Will this also prevent us having to pay probate taxes upon his passing?

    ReplyDelete
    Replies
    1. You are correct that creditors of your father could force the sale of the house in order to satisfy his debts.

      If there are liens against the title of your father's house, you cannot "add" names to the title. Adding additional owners means that you are transferring the title from A (your father) to B (your father and you). The liens on the title are there so that the title cannot be transferred without the liens being paid out.

      Lynne

      Delete
  65. Hello Lynne. A friend of mine recently told me that they would like to register their late dad's land that is overseas and have a title to it. The land is indicated as their dad's in his late dad's Will. Their neigbours vouch for them. There are no outstanding claims to the estate. None, 15 years later. They intend on registering this land among the three siblings and apportioning each other through a separate document (deed) a third of the interest. Does that sound reasonable in law or carry positive legal effect for them?

    ReplyDelete
  66. I know you are not a fan of adding a child's name to title but... I own my house and am in the process of buying a condo for my soon to be 19 year old to live in while she attends college. I was planning on completing the sale as joint tenancy as I thought it would "simplify" things - her principle residence, if I die it simply passes to her and if she wanted to keep it long term, I could remove myself from title. But after reading this and other material, I'm wondering if it would in fact just complicate things if she runs into financial or marital issues in the future or if we want to sell the condo before I die do I end up paying tax anyway? I almost wonder if I should just let her "buy" it herself?

    ReplyDelete
  67. My sister was put on our mother's title to avoid probate. Sister lives in US and has become an american citizen. Hasn't renounced her canadian citizenship. An accountant suggested she take her name off the title as if left on and mom passes, it would result in no capital gains exemption for property (farm) and residence. I have read that as soon as a name is taken off, it immediately triggers capital gains as it is as if property has been sold.Mom is in long term care and has no capacity to make decisions. Both sister and I have power of attorney and are executors.
    What are implications if sister takes her name off before mom passes.
    If sister isn't beneficial owner will estate automatically be probated, ie not considered sister's property and proceeds shared equally or will it pass on to sister resulting in paying double capital gains. Thanks.

    ReplyDelete
  68. Hi, I read your article which really has the wheels turning in my head. My dad recently passed away leaving my mom with a 2nd mortgage to contend with. I don't live nearby and my brother still lives there, now with his pregnant girlfriend. We all talked and decided as of now our equal share is $49000 each of the equity. Mom wants to keep the house so in order for the bank to agree to a re-issue of the morgage my brother would have to apply with my mom. This worries me. First of all my brother is now bragging of how its a given that the house is his as he now has to pay something (up til now he lived there for free). Also his pregnant girlfriend of 5 years who also is living there is quite vindictive and puts my brother through hell. I have a feeling through all this I am going to get screwed and now I worry my mom will too. Any advice on how to keep us all safe and what I can do to ensure I get my share of the inheritance ? Thank you im advance.

    ReplyDelete
    Replies
    1. Tara, this agreement needs to be in writing, prepared by a lawyer who works for your mom, not by one who works for your brother.

      Lynne

      Delete
  69. Hi my parents are still living in their home. They are 90 and 92, dad has dementia and I am not sure how much longer he can live there. My brother and sister in law moved in to care for them. They still own their own home in Langley. Both my brother and I have POA's for both parents.

    My brother and I get along very well and he may continue living there and sell his home in Langley. The will divides the estate 50/50.

    Is there anything my brother and I should do in terms of the house. Just leave it in parents names while they are both alive and then take the name off when they die, leaving only the living parent on the title. Now if one parent lives for a long time we may choose to sell the home, what happens then?
    If they are not living in the primary home but a care home, is there capital gains?

    What advice would you give.

    ReplyDelete
  70. My Son has purchased a home when his spouse was non resident. Now She is Resident. I have co-signed the mortgage with only 1% share. Both are now living in the home. Can Both of them consider it as principle residence for tax purpose. Are there any other possible issues. I will love to know what you think.

    ReplyDelete
    Replies
    1. I suggest you ask an accountant these questions. Find one who is experienced in income tax matters.

      Lynne

      Delete
  71. Hi, my mother sold her home last year and myself and my brother's names were on the deed. She lived in this home for years. I believe my mom isn't subject to capital gains because this was her principal residence, however, do we children have to claim any capital gains? Thank you

    ReplyDelete
  72. My husband found out years after, his brother, some how convinced their mom to sign over ownership of her home. She was removed and he was added. He did not pay for the house, in fact the parents were generous and gave both sons money for their down payment. A couple of years after he took ownership of the house, he added his wife to the title. When the mom continued to suffer from dementia and was placed in a home, his brother sold the house. We know the mom was not given independent legal advice and the mom was not given any funds from the sale. The same son is also joint on her bank accounts. In 2016, the PA finally came into play and my husband was able to ask the bank for statements. After reviewing four years, he discovered money being transferred, by his brother to his brother’s own accounts and accounts he holds with his wife. The man on a couple of occasions deposited the mom’s pension cheque and transferred the amount or more to his joint account with his wife.
    Over the course of fours years viewed, my husband can prove his brother transferred to his accounts over $20,000. There are also numerous unexplained cash debits and interac transactions for LCBO and gas stations. Their mom does not drive or drink and the one LCBO debit took place when she was hospitalized, at the time touch and go.
    Other items that came to light and tips for people to look for, he had a T2201 completed and placed his name as the person who can claim the mom’s disability tax credits. (the T2201 will allow him to claim her expenses now, past and in the future) This was done by having my husband sign a T1013 to have her income tax done, and under the representative (accountant), he had the accountant submit a T2201. The joint power of attorney was never informed and the accountant refused to give the joint PA any info, even though they knew he was the PA.
    EX: he sells the house, not his primary residence, is taxed heavily. He off sets his tax burden by claiming his mom’s tax credits, such as disability tax credit and medical expense tax credit.
    My husband only found out when the accountant sent him docs to sign (T1 adjustment) , removing tax credits from the mom to the brother for medical expense and was never told who was on the receiving end of the disability tax credit. We can only assume it was his wife,
    I started suspecting my brother in law about ten years ago, but my husband did not want to listen or see the signs. It was his brother after all. Now with paper based proof, he can see what was going on right under his nose.

    The father passed away about 1990, so we do not know how long this has been going on, with her accounts, as she added him not long after the dad died.
    A title search on the house indicates in 2005 he took ownership of her house and in 2013 added his wife. The mom lived there until 2015. We did wonder what would have happened to the mom, if the son had died between 2005 and 2015. We have a feeling she would have been left at the curb.

    ReplyDelete
  73. Me and wife bought a house in 2011 as a gift for our two daughters to live in togher. We put our name in the titles for 80% but we wrote an agreement with our daughters that the house is theirs and we only put our names in the title to make sure they get along with each other and after 5 years we will transfer the title. we also indicate that we may extend the 5 years to more. After 5 years since we were happy with what they are doing, we went to Notary public and transfer the title. The Notary public told us that we have to pay capital gains based on FMV. My question is do we have to pay capital gain when we did not have any intention to have any interest in the house and we made this clear in our written agreement with our daughters.Saying this, if we do not need to worry and it is considered as a gift, then do we have to file anything at all for 2016 when we transfer the title or we can leave it as it is and assuming that it was a gift in 2011 as we intended.

    ReplyDelete
  74. Hey lynne,

    My mother and brother want to flip a house 9(not the one we live in) and want to put it under my name so they don't get a tax penalty....should I agree to this and what are the possible consequences? Does Canada laws have a declaration of trust and would using that allow them to get their tax break while keeping me from the stress of dealing with owning a property?

    ReplyDelete
    Replies
    1. Since I limit my practice to wills and estates related work, the flipping of houses is not something I can discuss. If you want to know about tax penalties, talk to an accountant.

      Lynne

      Delete
  75. Parents are retiring, instead of downsizing he has asked us (son, daughter in law and 1 child) to pay him 1/2 of the value of the home, and be added to the title. We have lived with each other for 5 years previous to this possible agreement. Considering culturally it is tradition the youngest son caretakes for the aging parents, this is something we have been planning for. We are curious what legal steps should be taken to protect the best interest of all parties. Keeping in mind, when Dad passes away, Dad wants the three siblings to split 1/2 of the home value, valued as of today's real estate prices. It works out to be $60,000 each sibling. The son living in the home would have to pay each sibling $60,000 when Dad passes away. We would set up a legal trust for this. Any information would be greatly appreciated. Thank you.

    ReplyDelete
  76. After my Dad passed away, my Mom sold their house and bought a new house with the proceeds. I am living with her, as I cannot afford to buy my own home, and Mom cannot manage a house alone.

    Due partly to a suggestion from the realtor that Mom would receive a land transfer tax rebate if I was included on the title (I would be considered a first-time buyer), we had the lawyer do just that.
    He did warn us about some things you mention (sibling disputes, divorce, etc.). I can only say that we are confident those problems will not arise, though I know that seems naive.

    We also went ahead with it thinking that since I would be living in the house, it would make things easier - giving me more authority to deal with insurance, utilities, etc., and covers us if mom should become incapacitated like dad did.
    I guess we also thought having my name on the title would somehow be helpful if mom should pass away. But since I already live in the house, would it then be considered my principal residence whether I'm on the title or not?

    I should add that my sister and I are appointed on mom's power of attorney, and in her will we are executors and equal inheritors of all assets.

    Having read this article and thought about it all, I wonder if we did the wrong thing.
    First, our lawyer said that if mom should pass away, the house would be mine alone. Is he correct? I think we made it clear to him that both mom and my sister would consider it to be my home and wouldn't want me pushed out. But does the will supercede this?

    My main concern is what you said about being sued. I don't think bankruptcy would be an issue; I don't own a business and have no debts. But car accidents happen all the time. I have very few assets myself that anyone could take, but it would kill me to be the cause of mom losing her home.

    Are the perceived benefits of having my name on the title actually realistic and do they outweigh the possible repercussions?
    Can you please tell me what it would typically cost to remove my name from title?
    We are in Ontario.
    Thank you so much.

    ReplyDelete
  77. Hi Lynne

    First off what an excellent and informative website I have already learned so much so thanks for taking the time to do this.

    My father recently passed away in Ontario and according to his will he left everything (his house, a RRIF account, a chequing account and GIC) to me and my sibling. We are both executors and we both had POA severly and jointly during his life.

    A couple weeks before he died my sibling went to an estate lawyer and had their name put on title using their POA. My father was in the hospital awaiting assisted death but he told them to do this to avoid having to probate the house which is worth around 350K. Their name was also placed on the GIC and chequing accounts after my mother passed around 6 years ago again to avoid accounts being frozen and/or having to probate them.

    My question is if they put their name on title as joint tenants (now they are having my fathers name removed from title) does this mean they own that house which the will states is to be sold and divided equally between the two of us? They say the lawyer told them they would not have to probate and all they had to do was get my fathers name off title in order to sell. They are insistent that they do not need to probate because their name is on most of the accounts and the house. So basically they have taken control of everything even though the will is clear about all property and investments being liquidated and divided equally between us two who are also co-executors. Their lawyer also insists that probate is unnecessary and has not included me in any of it.

    Alot of what I have read (pecore vs pecore for example) says that the assumption is now if an adult child has their name on title it is not a gift to that child unless they can prove an intent to leave that asset to that child. But not only do they not know that but their lawyer has said nothing about it.

    They are insistent that everything will be divided equally but it is very uncomfortable that they have almost total control because their name is on everything and they have basically cut me out of the executorship process because all these assets fall outside the estate at least in practical terms and according to their lawyer.

    Any help or advice would be extremely appreciated. Thanks so much.

    ReplyDelete
    Replies
    1. Presumably your father had the mental capacity to give those instructions but he did so without legal advice, I would say.

      To answer your question, no they do not own the assets. They are held in trust for the estate unless there is evidence that your dad intended them to own them personally. That does not seem to be the case from what you've told me.

      I agree that it's uncomfortable that they have complete control, particularly since your father intended for you to be one of the people in charge.

      However, I also find it uncomfortable that someone used a POA to transfer to assets to himself when this is a clear breach of fiduciary duty. Your sibling had better hope that everything goes smoothly here, because he or she is in a dicey legal situation. If you find that you're having a problem with him or her being unreasonable, you do have that ace up your sleeve.

      Lynne

      Delete
    2. Thanks Lynne for the quick reply! I really appreciate it. Just a couple follow-up questions:

      I don't have a lot of information on the specifics especially the paperwork as my sibling took everything and isn't too clear with answers to my questions but do you think that probate will be necessary even with their name on the accounts/house or will that be enough to avoid probate even though it doesn't give them ownership? Their lawyer indicates no probate for the house but is looking into the bank accounts. I just don't know what (besides their moral obligation and what they have said) is going to make them distribute things equally. For example what is really to stop them from just taking things and putting them into their own account instead
      an estate or neutral account? Maybe with innocent intentions but as communication is difficult it would be hard to make them see why their control is awkward and upsetting and shouldn't continue into the liquidation of the assets. They believe that because they "did more" at the end of his life that they are entitled to more control in general.

      Which brings me to my next question: is there anything I should do or prepare to do if, as you say, they become unreasonable or unfair or worse?

      Thanks so much for your time.

      Delete
  78. Hi Lynne,
    Thank-you for having your blog available for us to ask/inquire with you on your professional advice. Most helpful!

    My aunt has her property. She is looking into being the guarantor or co-borrower on her daughter's mortgage. Which brings me to ask/confirm,- there is no mortgage lender who would remove her for title, even if she has 1% share of ownership?

    With the new Canadian housing rules, if and when my cousin sells her property, would my aunt have to pay taxes on the capital gains or is she exempted for its not her primary residence?

    Any help/advice would be appreciated.

    ReplyDelete

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