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Thursday, April 8, 2010

Answering your questions - joint property with parents

Further down in this blog, I recently received an interesting question from a reader, which was:

"What are the implications for me and my elderly parents of purchasing or jointly owning their home? I am single and will remain so, so joint assets with a partner are not an issue."

Here is the answer I provided:

"When you and your parents are deciding whether or not to put you on as a joint owner of their home, it's a matter of weighing risk against benefit. Everything you do in estate planning boils down to that.

What are the risks?
For you the risks are minimal, as you are not the one who financed the asset in the first place. It's not where you live (as far as I know). So if for some reason the property were to be lost, you wouldn't lose your home or a significant part of your assets.

Your parents, however, stand to take a pretty big hit to their finances should the property be lost.

As you've mentioned, there is no spouse and therefore no potential divorce to worry about. That's a big risk removed.

However there are other ways in which you could inadvertently cause your parents' home to be lost. For example, you could cause a major car accident in which you are being sued for millions. You could give a personal guarantee for a business venture that fails. Either of those situations could cause creditors to go after all of your assets, including your parents' home.

Another downside for your parents is that if your name is on the title as a joint owner, they can't sell or mortgage their home without your written consent. This means a loss of control and independence for them.

What are the benefits?
You haven't mentioned whether you are an only child or not. If you are, you are likely the person who is going to inherit the house in any event. Putting the house in joint names with you might avoid the need for getting probate from the court, but that's only the case if your parents have no other assets.

If there are investments, a fairly large bank account, a cabin, mineral rights or any business interests, the executor will have to apply for probate anyway.

In other words, if the house is being put in joint names just to avoid probate, that may or may not be effective, depending on what else is in your parents' estate.

If you are not the only child and your parents want to treat their children equally, and you get the house, there has to be enough in your parents' estate to give the other children an amount equal to the value of the house. For most people that's not possible.

I hope this answer gives you the information you need."


  1. Thanks a lot Lynn for posting so much great information on this blog. I learned a lot by reading it. Can I ask a stupid basic question? Can we easily add and remove a person to the house title? What is the process? If it is easy enough, probably I can join my kid's name to my house title when it is the right time, but not too early.

    Thanks again,

    1. Benny, this is not a stupid question at all. Actually, I wish more people would ask it rather than just go ahead and take steps without finding the answer first.

      Can you easily add someone to a title? Yes.

      Can you easily remove them? No, not usually.

      Before adding your kid's name to your title, consider this:
      1. If your kid gets divorced, you may lose your home.
      2. If your kid is sued, you may lose your home.
      3. If your kid goes bankrupt, you may lose your home.
      4. If your kid doesn't agree to sell the home when you want to, you can't do anything about it.
      5. If your kid doesn't live in your home when you sell it or pass away, you may have just landed your kid with a tax bill.
      6. Adding your kid's name to the title no longer guarantees that it will bypass the estate, because of new intergenerational joint tenancy rules.


  2. My dad left a will, had a prenup and his wife was set with property he bought for her and took care of her and her family. He left my sister as executor. During his life and before he got married they bought and sold property, he also bought property during second marriage and put properties with sister as joint tenants at the beginning. Stepbrother was realtor in all transactions so they knew everything. Now widow and greedy son who still owes money to my father and we are still paying his loan want maintenance and support for the widow claiming property was not put on probate. The will specifically says she was taken care of which is true. She was left out of will and she was ok during the time he was alive and never questioned it. They put CLP on all joint properties. What kind of laws are these when no one respects the will. Lawyers are just liars the two we had and took money without doing anything. we are on the third lawyer.. She has lied under oath that we did not disclose properties. But it was left to us in the will, joint names with my sister, she signed prenup and was ok while thinking she will get more after death. Gave her properties to her son and now says she is destitute. What can be done with these gold diggers. We will be going to court. But what kind of laws are these when a person dies their wishes are not respected. Lawyers are laughing all the way to the bank and overcharging for things they do not know how to do. What can be done? Now she wants us to pay her lawyers fees as part of maintenance while suing us. Lol what is going on with this society. Are there any law about her lying under oath and can we take her to court. She is 75.


    1. Since you said all lawyers are liars I can't imagine why you'd bother asking me a question.


  3. I am the major beneficiary of my uncles estate. His house was left to his caregiver and I was left the assets. Should the utility bills be switched over and paid by the caregiver or does the estate pay for everything . It's almost 2 years now. Think we are at the the end but I am not so happy with the distribution of almost 15,000 of household bills paid by the estate
    This is in nova scotia.thank you

    1. The house should have been transferred over to the caregiver as soon as possible. It does take some time to get probate, to pay bills, etc in preparation for the transfer of a property. It should not take two years to get to that point in normal circumstances but I have no idea if you are in normal circumstances.

      The estate should pay for some bills, such as the utilities you mentioned, that are necessary to protect the house while it is in the name of the estate. Assuming that the caregiver already lives in the house, there is no reason why that should still be paid by the estate.

      Have you mentioned to the executor that this seems an unfair use of estate funds? As a residuary beneficiary, you do have to expect estate bills to be paid before you receive your share, but you have the right to receive a FAIR share.



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