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Wednesday, April 13, 2016

Can my wife transfer our rental property without probate, since we treat it as a joint asset?

A reader recently raised an interesting topic. I frequently talk to clients who say that although their name is on an asset, it "really" belongs to someone else, or that there are side arrangements that affect the ownership of an asset. In this case, the reader was wondering whether the way they treat a house for tax purposes will impact ownership of it. Here are his note and my comments:

"The title of a rental property is in my name instead of jointly with  my wife as it was easier this way for getting a mortgage at the time of buying the property. Since then, we have been treating the property as a joint asset for tax purposes and split the rental income in our tax returns for 6 years. The question I have is that if I die, how could my wife transfer the title to her name without probate? I have a will leaving everything to my wife."

The short answer to your question is that she can't.

The longer answer, however, is probably more useful. The situation you've described is one in which the actual title to a property does not necessarily reflect who you believe "really" owns a property. You're not the only person who thinks that way, by any means. Parents add children to their titles when the property still "really" belongs to the parents. Parents' names are put on title to help a child buy a house, when the house "really" belongs to the child.

The fact that you and your wife have split the rental income will not affect your ownership of the property. Neither will the fact that you have made a will leaving the property to her. If her name is not on the property, she doesn't own it.

The issue is that a title to a property conveys fixed legal rights. This, of course, is done to protect ownership of land. One of the rights is to have full ownership even when someone else comes forward and says that the property is "really" theirs. Nobody can walk into a land titles registry and legally add their names to other people's property without going through the steps that ensure the owner of the land consents to the change of ownership.

If you should pass away, your wife will have to go through the probate process because the house is solely owned by you. An option you might consider is at some point transferring the house into joint names with her. If you passed away while the house was in both names, she would not have to go through probate. Please don't do this without thinking about the impact on your estate plan and your financial life in general, as it is usually a mistake to have too narrow a focus when dealing with legal questions and major assets.


  1. Dear Reader, as an aside, you should really discuss with an accountant the fact that you are splitting rental income/expenses with your wife, that is 50%/50% . Because she does not own the property, there might be some tax implications down the road disallowing this "splitting of income" Your wife because she is not on title, really does not have any rights (for tax purposes) to claim income and expenses on this property. Please verify with an accountant .. Best Regards

  2. My case is living proof that a will is never enough. However; I beg to differ that no one can walk into a land titles registry adding their name without the owner of the land consent, & owners must be notified prior before adding some one on title!! Any one can put their name on title & property theft is so easy that frankly I have met so many people who all lost their homes because of it! And none of them were even aware of someone else being on title to their property. Worst case is mine. My mother's name was on the matrimonial home in Joint Tenancy. My father split the joint tenancy when he got mad at her. When he became terminal he left her the matrimonial home in his will. My brother 8 years after father died, as executor had a lawyer put his name on the matrimonial home, she was never informed nor did she consent. When I discovered it 2014, he had not paid the taxes & the estate including mom's home was all up for public auction. Again I hired a lawyer, but my brother continued to refuse our mother title to her home. To make a long 15 year battle short at 97 mother lost her home as it was on land that became somehow attached to the 11 plex that also the joint tenancy was severed by dad. Until just a few months ago, 3 lawyers later, I could get no lawyer to help me stop my brother, he put the estate into debt and the only way to get him off title was to sell. Mom 97 lived in the house since 1941, is now a tenant in her matrimonal home forced to sell to stop my brother from putting the estate into further debt. The entire estate was worth one million but mother wound up with less than $200,000.00 most of which will be spent taking my brother to court to answer to a judge for his crimes. Bottom line is despite his stealing mother's property & rights + all its' rental income that is not considered CRIMINAL BUT CIVIL in Canada. If he had stolen her TV however, police would have charged him with a crime - theft! Not so with property. Furthermore; mother was never advised of the severed joint tenancy, in Ontario law, it is legal, to not have to advise the lawful owners on title, and okay to be done in SECRET! I expect to fight the rest of my life to make property theft a criminal crime! I love your site Lynne Butler. My new lawyer loves it as well. I post everything you share to my facebook, google+, blog to share with my community. You have help me help others. Thanks you so much.


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