I have talked about title transfers in BC: How to Add or Remove Names on a Property Title before, you can read it here, but I want to bring a different aspect of a family transfer – Estate Planning. Many people own property or bank accounts sole in their names and once they start to think about estate planning, probate fees and bureaucracy, they make decisions to ease the life of their loved ones by gifting them assets before passing away. Therefore, they choose to add people on title with them.
Estate Planning and Joint Tenancy
As part of my estate planning meeting with my clients, I also discuss the type of ownership of their assets. As we know any registered asset can be registered as Tenants in Common or Joint Tenants. One of the main differences between the two types of shared ownership is what happens to the property when one of the owners dies. When a property is owned by joint tenants, the interest of a deceased owner automatically gets transferred to the remaining surviving owners. When the property is owned as tenants in common, the interest of a deceased owner gets transferred to its beneficiaries in accordance with that person’s will.
Joint Tenancy vs. Tenants in Common
When choosing to include someone on title as a Joint Tenant, make sure you also have a letter clarifying your intentions with that transfer. You have two options:
Outright Gift
1 – Outright gift to that person/people being added on title with you. Meaning, upon your death the surviving owner can use that asset for anything they wish, no strings attached. For example, a parent has 3 children, but wants to leave the property or bank account to only one child. The parent adds that child’s name on his/her account and on the property title. In addition to that, we also need to have a gift letter, signed by parent confirming their intention is to make an outright gift and not create a resulting trust. This will avoid potential legal problems in the future.
Leaving the Asset in Trust
2 – Leaving the asset in trust to the other person, with the intention that he or she will then divide the asset with your other beneficiaries from your will. Many parents want to leave an asset in the name of one child in trust that he or she will then distribute the asset with the other siblings.
Supreme Court Presumption
If there is no letter of intention, the Supreme Court Presumption will be that a gift or advancement to an adult child will be to hold that asset in trust for the estate of the deceased parent. The beneficiary child will consequently have the burden of proving that it was his or her parent’s intention to give that asset to him or her as an outright gift.
In conclusion, make sure you have a professional specialized in estate planning to discuss not only about your Will, Power of Attorney, and Representation Agreement documents, but also types of ownership of all your assets. Be sure to have the intention of the transferor recorded in writing – does he or she intend an outright gift, or does he or she intend the transferee is to hold the property in trust? For important decisions such as this, a notary can help provide peace of mind that everything is in proper order.
At Zancope Notary Public, our specialty is Wills and Estate Planning documents (Representation Agreement and Power of Attorney). We are a full-service firm with two notaries full time at the office. We also offer real estate services for clients in Langley and throughout Greater Vancouver and the Fraser Valley. We can help you with buying, selling, and refinancing real estate, and provide family property transfers and independent legal advice.
If you have any questions about this article or estate planning, in general, or if you want to make an appointment with Zancope Notary Public, please contact us at (604) 260-6783.
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