Joint tenancy as a defence to probate costs

It's very common these days to hear people say that they've put their assets in joint names with their children "to avoid probate". But is probate really that bad? Do these people even know how much they'd actually pay if they left the assets in the estate? And most importantly, do they have even the faintest idea of the risks they are taking and the problems they may be creating by putting their kids' names on their assets?

The answer to all of these questions is "no". People really don't see how something apparently so simple can end up with so many problems. If you're considering putting your assets in joint names, or you've already done so, protect yourself by finding out what your risks are while there is still time to take additional steps, or even remedial steps. To illuminate the issue, I've attached an article by Don Shaughnessy of The Protectors Group. He talks about this very situation, and uses a monetary example from Ontario. Click here to read this very well-written article.

Don't take these shortcuts

I'm attaching a link to an article by Elaine Blades of Scotia Private Client Group, which I especially like because Elaine speaks in a straightforward way that really gets her point across. In this article - click here to read it - she talks about two things that people tend to do with their estate planning because they think they are shortcuts. Unfortunately, the shortcuts tend to backfire in ways that people just didn't foresee. I bet you anything that when you read this article you'll recognize them as things you or your parents have done or you were thinking of doing with your own planning. One involves joint property and the other involves keeping things too simple. I highly recommend reading this one.

House in the wife's name only - what if she passes away?

Most married couples own their homes as joint tenants, so that if one of them passes away, the other one automatically owns the home. This arrangement helps to give assurance that the surviving spouse and the family's children will legally and financially be able to continue living in the home.

But there are sometimes reasons why couples set up other arrangements. Often those reasons are related to finances or poor credit, but it could also be to avoid unwanted legal consequences or to protect assets from potential creditors. Not owning the home jointly may be the best arrangement available for a particular couple, but it tends to leave them wondering about who would own what should one of them pass away.

A reader left me this question about their home:

"After being married for almost 3 years, husband and wife put down payment together to purchase a house, but the title of the house is only under the wife's name. What will happen if the husband or wife pass away during marriage?"

If the husband passes away first, really nothing is going to happen about the house, as he doesn't own it. If the wife should pass away first, the answer could be much more complicated. Here are some of the factors that would be taken into consideration when dealing with the home:

Did the wife leave a will? If so, the will should address the question of what is to happen with the home. She might have left a will leaving the house directly to her husband. More likely, she may have left a will leaving her entire estate to her husband. If she has left the entire estate to him, that will of course include the house. Her will might also have done something entirely different, such as putting the house into a trust for their children, or directing that it be sold. The will should also address the household and personal items in the home.

Does the couple live in a province with Dower rights (such as Alberta)? If so, the Dower Act states that on the passing of the wife, the husband would have the right to live in the house for the rest of his life. He would always have a roof over his head, but he would not be able to sell or mortgage the house as he would not own it.

Who else is in the picture? In the absence of a will, the husband would receive whatever the law of the province of residence says he will receive from his wife's estate. He may have to share with the family's children and/or with any children the wife had in a previous relationship. Intestacy laws tend to work on fractions as opposed to specific assets, and would not necessarily include or exclude the home from the husband's share.

Is the husband adquately provided for, either by the wife's will, or by intestacy law? All across Canada, surviving spouses have the right to claim a larger portion of an estate if they have not been properly provided for. This is true whether or not the deceased spouse left a valid will behind. The husband might launch a claim of this sort and through that receive the house. Again, this might depend on who else is in the picture with competing claims.

Does the wife have a lot of debt? Depending on the type and amount of debt, the house might have to be sold to pay the wife's liabilities. Debts and taxes must be paid before any beneficiaries receive anything from the estate, even if that means selling the home.

Is the husband in bankruptcy? If so, his inheritance, including the house, may be seized by the receiver and used to satisfy his debts.

As you can see, nothing good is going to happen without some effort by the wife to protect her husband in the event of her death. She should prepare a will that sets out her intentions for the house. She should also speak with an estate-planning lawyer in her province who can inform her more specifically about her options and consequences.

Severing joint tenancy

Even though I'm a wills lawyer, not a real estate lawyer, I receive questions from readers almost on a daily basis about joint tenancy and tenancy-in-common. This topic is important from an estate planning perspective, because anyone making a will obviously needs to understand exactly what he owns and how the method of holding the title affects him.

One of my favourite blogs to read, http://www.allaboutestates.ca/, has a new posting that gives quite a bit of detail about how joint tenancies can become tenancies-in-common, a process that is called 'severing' the joint title. The post covers a recent decision of the Ontario court of appeal which summarized the three ways in which joint tenancies can be severed. Those of you looking for more information on this topic should definitely check out the blog post by clicking here.

I should also point out that in some provinces, the land titles office or registry procedures manual is available online. Some of those links are available here on my site. I know the idea of reading a procedures manual is daunting, and it doesn't sound like the most exciting reading, but it can be a really good source of straightforward information that answers those "how do I do this?" questions.

Passing the title to the family home to the kids

A reader and his siblings recently inherited the family home from their mother, and asked me the following question about the title. As so many parents are going to pass their homes to you readers together with your siblings (despite my constantly suggesting that they don't), I thought the question would be of interest to many of you.

Here is the question:

"Our mother left the family home to my 3 siblings and myself. Each of us is listed "as to an undivided 1/4 interest". Can I conclude that this is "tenants in common", as the title certificate does not specifically say that? If this is correct, am I able to "give up" my share as I see fit? ie: sell to an outside party, give to another already on title, etc.?"

This reader is correct that the four of them are tenants in common. Whenever a title specifically says that each person on the title owns an "undivided interest" such as in this case, each owner is a tenant in common. In this case the four shares are equal, but that is not always the case with tenants in common.

Each of them owns 1/4 of the property to do with as he or she wishes.

The type of ownership is significant, as it determines an owner's ability to deal with his or her share. As the reader has correctly mentioned, a tenant in common can sell his share (assuming someone wants to buy 1/4 of a house) or pass it to another title holder. Tenancies in common are usually mentioned in wills, as any ownership of this type would fall into the estate on the death of the owner.

By way of contrast, if these four people were joint tenants rather than tenants in common, they would not be able to do any of these things. A joint tenant cannot sell or transfer a part of the joint title, and cannot leave the title to anyone in his will. The surviving joint tenants will still own the title should one of them die, which is why I always refer to joint tenancy as "last man standing".

As regular readers of this blog know, I'm not at all in favour of a parent leaving one house to four people who each have their own wishes, finances, families, and agendas. However if a parent is determined to punish the children by doing this, it's better to do as this reader's mother did and leave it to them in the will, rather than put it in joint names during the parent's lifetime.

How to make an intergenerational joint tenancy work

It's great that people are reading my warnings about using joint tenancy as an estate-planning tool without legal advice. This question from a reader gives me a reason to go a little deeper into the issue of intergenerational joint tenancy.

"I live with my mom in her principal residence. It is paid for and she has no debt. She intends to pass on the house to me after her passing, and her remaining assets divided up equally amongst the other siblings. Having read some of your other articles regarding inter-generational joint tenancy not working as true joint tenancy, what is the best and most definitive way for her to pass on her house to me without having to incur probate cost and deal with unwanted conflicts from other siblings ?"

A parent who wants to leave his or her home to one of the children has a couple of options. There is never one right answer or arrangement that suits everyone.

You are right that if your Mom doesn't add you as a joint tenant on the property, and the property is in her name alone when she passes away, it will be necessary to probate her will in order to transfer the house. Adding you as a joint tenant might or might not keep the house out of probate - more on that in a moment - but even if it did keep the house out, the chances are good that your Mom's will would have to be probated anyway if there are other assets.

If your Mom wants to add you as a joint tenant on her house so that you inherit the house on her death, it can be done. Yes, you are right that intergenerational joint tenancies don't automatically operate as true joint tenancies any more, but there is more to that general rule. If there is evidence provided by the parent at the time the property was made joint, this may well serve to create a joint tenancy that will properly hold up. This is why I always tell people not to put the house in joint names without legal advice, because the lawyer will help the parent document those intentions in the right way.

So, your Mom can add you as a joint tenant on the house and document her intentions. To make that even stronger, your Mom can make a new will close to the time she changes the title on the house and confirm her intentions in the will. As mentioned, this might not avoid probate for the other assets of the estate but it would keep the house out of probate. That would keep probate fees lower.

Conflict from other siblings is an issue that causes untold damage and I think you and your Mom are smart to think about the optics of leaving the house to you. The way I read your question, I concluded that you get the house and your siblings divide the rest, without you getting a share of "the rest". I don't know what the monetary value is, but given your concern over conflict, I assume they'll be getting less than you will in terms of value. Is there a reason why your Mom wants to give you more? Have you been the one who has always helped her, or do you already live in the house? Has your Mom already given financial help to the others? Even a brief statement in the will that explains her actions can have a calming effect. I am talking about a statement that starts off with "I love all of my children equally but I am leaving a bit larger share to Child X because...", followed by one or two lines explaining her reason.

Also, your Mom needs to clarify whether getting the house means also getting the contents of the house along with the title. Personal items cause more fights than money does, so she needs to be VERY clear on whether your siblings can take anything out of the house.

This is not a will that your Mom should be making on her own. She should talk to a lawyer who specializes in wills and estate planning to discuss the wording of the will and the implications of an intergenerational joint tenancy.

What's in an estate anyway?

A reader has asked another good question, this time about what is in an estate, and how the estates of a married couple work together. Here's the question:

"Just how is an 'estate' is defined? Is it the assets and liabilities held by a couple, or by an individual? When the first of my parents passes away, will it be necessary to 'execute' the estate, or will this only happen when the second of them is gone? Their only property (their home) is of course held by the two of them together. It seems a bit ridiculous to have to go through the entire process of executing an estate twice."
Each individual has an estate, which holds all of the assets owned by that individual, as well as his or her liabilities. Sometimes, though, ownership depends on other people, so the individuals can't be completely separated. You have to understand how assets are owned and the effect of the type of ownership.

What does one half of a couple actually own? Let's say the husband jointly owns the home with his wife. He has a life insurance policy that names her, and a RRIF that names her. His bank account is joint with hers. Yes, he owns those assets during his lifetime, but none of them would be included in his estate if his wife were alive. The house and bank account would go to her by right of survivorship, so are not part of the estate. His RRIF and life insurance policy have a direct beneficiary named so they don't form part of the estate either.

How different the situation would be if the same man had the same assets but his wife had already passed away. With no joint owner any more, the house and the bank account are in his name only and are now part of his estate. With no surviving named beneficiary, his RRIF and life insurance would pay to his estate.

Most couples will intentionally set up their financial arrangements to ensure that when the first one of them dies, the other automatically receives assets either by joint ownership or by beneficiary designation. It's significantly more complicated in a blended family of course. If things are properly set up, it's not necessary to deal with the estate when the first one of the couple dies. In fact, there usually is no estate. Only on the death of the second half of the couple does it become necessary to deal with an "estate".

To achieve this proper set-up, the couple must have wills and powers of attorney. They must consult a financial planner, banker, or estate planning lawyer to ensure that they've properly named their beneficiaries on RRSPs, RRIFs, life insurance policies etc. All aspects of their finances must work together.

Simple estate planning may not be so simple after all

This article from About.com discusses home-made estate planning such as putting kids' names on your assets. I agree with the author that this may not end up being as simple as you think. Sure, it's simple and easy to actually put it into place, but the outcome is often far more complex and expensive than you ever thought possible. Click here to read the article.

If my name is on my Dad's account when he dies, do I own it?

I notice that in the majority of questions I'm asked about parents and adult children owning assets together, the question contains the words "my name is on it".  I'm not surprised that so many people are uncertain about the ownership and ultimate destination of assets when this is the full extent of the information available to them. Your name can be "on" an asset in more than one way, and even then, there are other circumstances that may affect whether or not you will own that asset after your parent passes away.

The first fact that you must clarify is whether an asset is held jointly with a right of survivorship, or whether it's held as tenants-in-common ("TIC"). You are likely to find the TIC situation only with real estate, including mines and minerals titles, and not on bank accounts. The fact that there are two names on a land title does not necessarily mean that the title is jointly held.

To know for sure whether land is held jointly or as TIC, you must read the title itself (or a search of title, which can be done through a lawyer's office or a registry). If the title is TIC, you will see wording such as "each as to an undivided one-half interest" or some variation on that.

If you are a TIC on a title, you will own only your share of the title when the other person dies. The other person can dispose of his share in his Will, or if there is no Will it will be divided on intestacy.

If an asset is jointly held, this usually gives rise to a right to survivorship. This means that when one of the owners dies, the other owner continues to own the whole asset. This is commonly seen in bank accounts and investment accounts, as well as real estate.

Once you have established whether you own something jointly or as TIC, you have taken the first step. As mentioned above, if you are a TIC, you have your answer. But if you are a joint owner, the question is not yet fully answered.

The complication arises whenever an asset is owned inter-generationally. The usual situation is between a parent and a child, though it could also be between an aging relative and his or her niece, nephew, grandchild, etc. In these situations, our highest court has said that when there is an account held intergenerationally, and the parent is the one who actually put the money in, on the death of the parent the money is deemed to be held in trust for the parent's estate. This is drastically different from what used to happen automatically with joint accounts.

What must happen next is that there must be some written record of whether the parent intended for the money to go to the child by right of ownership. The record must have been made around the time the child's name was put on the account. If no such record exists (and in the vast majority of cases, it doesn't) then the child has to give back the money into the parent's estate.

One of the ways parents are creating written records of their intentions is by making statements in their Wills. This could be a simple statement in the Will confirming that they do or do not want the account or investment or property to go to the child as a true joint owner.

Note that the question of joint owner with right of survivorship does NOT affect husband and wife ownership. The comments I've made in this post are restricted to inter-generational ownership that is usually set up by the parent who mistakenly thinks he or she is simplifying the estate, or just wants help with the banking.

You can see how this area of estate administration is rife with disputes, misunderstandings and hard feelings between siblings. I've said repeatedly that joint assets between parent and child are rarely a good idea, and that is largely because people almost always fail to confirm their full intentions. If a parent just wants help dealing with the banking, then he or she should use a Power of Attorney and leave the joint titles for those who truly want that child to inherit that full asset.

How do I sell my half of a jointly owned house?

The fact that I'm asked this question so frequently hammers home a couple of points for me. One is that people don't understand the nature of joint ownership. The second is that parents should stop leaving their house to all of their children jointly.

When two (or more) people own a property as joint tenants, there is a right of survivorship. This means that each of them owns the entire property, just as both would own every dollar in a joint bank account. There is no "half" in a jointly owned property. Each owns 100%. Therefore, there is no "half" to sell.

This seems to be a really tough concept for people. I'm constantly asked about this issue on my blog and at pretty much every seminar I present. One person argued with me for about ten minutes about the fact that if two people owned a house it HAD to be half and half. He had no legal reason to believe this, but that didn't stop him from being absolutely sure that he'd know this better than I would.

The whole idea behind a joint ownership is to leave the entire property to the other person when one dies. For example, if a husband and wife own their home jointly and one of them dies, the other still has the house. It's a "last man standing" concept. It doesn't really work for a number of siblings owning a house.

If two or more people want to own "halves" or "parts" of a house, they should hold that property as tenants in common. In that arrangement, each has a piece of the house that he or she can sell or leave to someone in their Will.

This brings me to the second point.

About 90% of the questions I get about how to get out of a joint tenancy come from people who own something with their siblings and the arrangement isn't working. It's almost always because a parent left the house to ALL of the children equally. Parents need to be realistic about the million or so ways this arrangement can go wrong. More than one child wants to live there, and nobody can agree. One moves in but won't move out and won't pay rent or expenses. The roof needs repairs but each wants the others to pay for it. One rents it out without the permission of the others. One causes damage and won't pay for repairs. Two want to sell but the third won't sign. And on and on and on.

Why wouldn't the parents choose one child to take the house as part of his share? Or direct that the house be sold and the proceeds split? This is truly something done without thought that leads to so many fights and headaches, I can't believe anyone does this anymore. Parents - please stop doing this to your kids!

Joint tenancy may not be the best option

I know that joint tenancy of property as an estate planning move is a topic of huge interest on this blog, so I'm sharing with you a post from All About Estates. Click here to read it. It talks about the consequences of joint tenancy that you may not have intended.

Joint property not the panacea hoped for

One of the mainstays of home-made estate planning is putting the assets of the parent into joint ownership with one or more of the children. The thinking behind this action is straightforward, particularly for real estate; putting property into joint names avoids the need for probate and saves costs.

However, joint ownership is not the cure-all that people hope for. More often than not, a dozen new issues and problems are created for each problem that is overcome. Sometimes the parent never knows about the problems because they arise after the parent's death, whereas other times the problems crop up during the parent's lifetime. But make no mistake - there are almost always problems resulting from the transfer of assets into joint names without legal advice.

One of the biggest issues for the parent is the risk of losing the asset during their lifetime. The parent's risk is that the children whose names are added to the title may run into issues that risk the parent's asset. For example, if the parent has added a child or children to the title to their home, the home is at risk if the child gets divorced or is sued. The parent could lose their home.

Parents don't always realize that putting the children's names on the title is not just a convenience - they have actually transferred ownership. The intent was to allow the child to own the property after the parent passes away, but the unintended and often disastrous result is that the child owns it immediately.

Another under-considered issue is taxation. The parent passes title to the children, and there is no tax at that point because the home is the parent's principal residence. But if the children live in and own their own homes, the parent's home is not their principal residence. Therefore when the children one day sell or transfer the parent's home, they will likely have to pay tax on the transaction. So the by avoiding the payment of a probate fee, the parent has imposed a tax issue on the children.

The issue is similar when the asset in question is a bank account. Often the impetus for the transfer is that the parent wants some help with banking. The solution arrived at is that putting the parent's account into joint names with one of the children will allow that child to help the parent. Again, the intent was not to transfer immediate ownership, or to transfer ownership at all.

There are two big risks associated with a parent putting a bank account or investment into joint names with one of the kids. One is that the child legally has full access to the money and could use it all for his or her own purposes. A parent who thinks that won't happen in his or her own family is ignoring the statistics and the financial reality. Of course it doesn't happen every single time, but sadly it happens much more frequently than any of us likes to think about.

The second big risk arises after the parent passes away. The ownership of the account or investment becomes an issue. Generally speaking, when a joint owner of an asset passes away, the surviving owner now possesses that asset. So the parent passes away and the child owns the account. But if the parent only wanted help with the banking, did he or she actually intend to give ownership of the account to the child? This may not sit well with the other children, who may feel that the child took advantage of the parent. It may disrupt the parent's stated goal of treating all children equally. Often, this ends up in court.

So what can a parent do to avoid these issues?

1.  Keep the big picture in mind. Do not simply transfer an asset without realizing the ripple effect it will have on estate planning, probate, taxation and family dynamics.

2.  Get legal advice. The bill for talking to a lawyer for an hour or two will be considerably less than the legal fees that might be paid to sort out a problem in court.

3.  Know what alternatives are available to achieve your goals. For example, use an Enduring Power of Attorney to allow children to help you with the banking.

4.  Get the facts. People in Alberta are often shocked to realize that they have risked a half-million dollar property to save a probate fee that cannot exceed $400. Find out from a reliable source what costs, fees and taxes will apply in your area.

Change of joint title causes family rift

You readers certainly send me a lot of interesting questions. Here is another I recently received that I believe will be of interest to many of you: "I hold a house in joint tenancy with my mother. She became ill and decided to change her "will". She gave a copy of the title to her lawyer and asked him to include it in her "WILL". Was it legal for him to do this without letting me know what he was doing? My mother has since passed away, and it has created a huge split in the family."

There are a couple of issues here. Let's take them one at a time. My first question on reading this note was whether the title was actually held as joint tenants, or whether it was held as tenants-in-common. The fact that there are two names on a title doesn't make it joint, (which many people find hard to accept, but there it is) so it's possible that the writer of this question was incorrect as to whether it's joint.

That leads us to the issue of what a person can do with a title in his or her Will. If the title to the property really was a joint ownership, then there is a right of survival for the surviving joint tenant, in this case the son or daughter of the mother. Nothing the mother said in the Will would change that and the title to the entire property would pass to the surviving joint tenant.

On the other hand, if the co-owners of the property were tenants-in-common, then the mother could say in her Will who is to get the title to her half of the property. The other tenant in common would still own a half, while the second half was divided up per the Will.

As you can see, how an asset is owned makes a world of difference. How do you know whether you and the other person on your title are joint or tenants-in-common? Get an update title to the property from your local land registry and read it. The title will tell you. If it's not the way you want it to be, you can change it or fix it.

The next question asked by the writer of this question was whether it was legal to change the mother's Will without telling the other property owner. As far as I'm concerned, the lawyer was absolutely right to keep the mother's wishes private. The mother is the client, not the co-owner. Lawyers can't discuss their clients' instructions or situations with anyone else without the client's express direction or permission. Obviously this person's Mom believed she knew what she wanted.

Something I don't know about this fact situation that I would ask if this person came to see me in my office is how the mother and offspring came to own a house together in the first place. I'd be curious to know whether it was once the family home, and whether the son/daughter was the one paying for the property tax, mortgage and upkeep.

I'm sorry to hear about the split in the family, but sadly I'm not surprised. People taking legal steps such as putting property into joint names (or taking it out) without legal advice pretty much always leads to trouble. It seems so simple on the face of it - simply to change the name on something - but the fall-out from unintended consequences can upset the family for many years to come.

Joint tenancy and tenants-in-common

The most widely read post of all time on my blog, which still gets hundreds of hits per month, is a post I made back in January of this year about joint names on title vs. tenants-in-common. I notice that a lot of people read several of my posts on this topic. So, just to save you some search time, I've pulled together all of my major entries on joint ownership below. Click on each title to read the article. If you still have questions, please feel free to post a comment for me below.

Joint or not - that is the question

Answering more questions about joint property

Should I put my home in joint names with my kids?

Don't forget to transfer title to joint property to surviving owner when one passes away

Joint tenants vs. tenants-in-common

What happens when a tenant-in-common dies?

Joint property with parents

The "avoiding probate at all costs" issue

The mythical will that doesn't need probate

Don't forget to transfer joint title to surviving owner when one passes away

Most people realize that when one joint owner passes away, the other one - the surviving joint tenant - automatically owns the property. This right of survivorship is the main reason that people own property in joint ownership in the first place. However, many surviving joint tenants don't realize that the Land Titles Office isn't going to change the title to the property automatically. The surviving joint tenant has to ask them to do that.

In order to change the title from joint owners to the surviving owner, that surviving owner will have to fill in a brief document at the Land Titles Office (or lawyer's office). Along with the document, the Land Titles Office will require an original Death Certificate. It must be the government-issued Death Certificate and not the Funeral Director's Statement of Death. In the document, the surviving owner will say that the other owner has passed away, offering the Death Certificate as proof, and ask that the title be amended to show only one name.

I've heard a number of surviving owners and a few executors ask why they should bother. Here's why. Say Jack and Janet are married and they put their home into joint names. Janet passes away and her Will doesn't need to be probated because everything is in joint names with Jack. He doesn't bother taking Janet's name off the title. Years later, Jack dies and his executor tries to sell the house. Jack's executor can sign on his behalf because Jack's Will was probated. But who can sign for Janet? Her name is still on the title. Jack's executor would then have to get Janet's Will probated too because there is no longer a surviving owner.

That is assuming her Will can still be found and hasn't been destroyed. And assuming that she named an executor other than the deceased Jack. You can see how a simple transaction all of a sudden becomes REALLY complicated.

The best idea is to file the necessary document at the Land Titles Office as soon as may be practical after the death of the first joint owner.

What happens when a tenant-in-common dies?

In this blog, I've mentioned a few times (and will mention many more times, I'm sure) what happens when a joint owner of property dies. However, I was recently asked what happens when a tenant-in-common dies.

A major difference between joint owners and tenants-in-common is that joint owners automatically have a right of survivorship to the entire property. Even though there are two or more joint owners, they are all considered owners of the entire property, as opposed to a half or a third. There are no halves or thirds with joint owners.

With tenants-in-common there ARE halves and thirds (and other portions). Each person owns only a portion of the property, according to the Transfer of Land document that was filed with the Land Titles Office when they acquired the property. There is no right of survivorship with tenants-in-common because each owner owns his or her section only.

It's possible for two people to be joint tenants of one portion of a tenancy-in-common.

When a tenant-in-common dies, his or her portion of the land is dealt with like any other asset that is in that person's name alone. Hopefully the person has a Will which sets out who will get his or her property. If not, there will be an administrator appointed by the court. Whoever is the beneficiary of the estate will become the new owner of the deceased's portion of the property. The portions of the property owned by the other tenants-in-common are not directly affected.

When deciding whether you want to own property as joint owners or tenants-in-common, or whether you want to own real estate together with other people at all, you really do have to think through the likely scenarios you might encounter. For example, if you own 1/3 of a house as a tenant-in-common and you want to sell your share, how do you get out of the arrangement? How do you sell 1/3 of a house? Are the other tenants-in-common in a position to buy you out?

If a new owner does join the tenancy-in-common because he or she has inherited someone's portion, how will the other owners interact with that person? Will they be able to agree on issues such as whether it should be sold, who should live in the house, etc?

There are pluses and minuses for different possible arrangements, and each comes with its own set of owner's rights. When I ask clients about their ownership arrangements, the vast majority say that they don't know whether they are joint owners or tenants-in-common. You should make sure that you thoroughly understand your own situation.

Answering more questions about joint property

I really do try to answer readers' questions as quickly as possible but I'm the first to admit that sometimes it takes me a while to get to them all.

I continue to get tons of questions about joint tenancy of homes, and about tenancy-in-common. I'll answer a few of them briefly here (let me know if you need more expanded answers):

Q: My spouse, who is also the joint tenant of our home, has died. How do I change the title into my name only?
A: Take an original Death Certificate (not Funeral Director's Statement of Death) to the Land Titles Office. You will fill in a document called a Declaration of Surviving Joint Tenant, or variations on that in other provinces. You then hand in the document to the Land Titles Clerk, who will amend the title for you. You do not need probate for this.

Q: Two people own a house as joint tenants. What happens if one dies and the surviving joint tenant has Alzheimer's disease?
A: The surviving joint tenant still gets to own the house, with or without Alzheimer's disease, as that is the legal right given by joint tenancy. The question may really be about the logistics of the paperwork, since a person with advanced dementia is not able to understand and sign legal documents. Who can act for this person? If the person with Alzheimer's disease has an Enduring (Continuing) Power of Attorney, it may be used to deal with the land. If there is no Power of Attorney, it may be necessary for someone to be appointed as a trustee by the court.

Q: What happens if both joint tenants die at the same time and there is no Will?
A: If it is impossible to tell which of the joint tenants died first, the law says that the one who is younger is deemed to have outlived the older one. This means the joint title first transfers to that joint tenant, leaving the land in his or her name only. If there is no Will, all of the assets of that person, including the land that used to be in joint tenancy, will be distributed according to the provincial intestacy laws. In Alberta, that would mean children of the second joint tenant first. If there are no children, then his or her parents. If there are no surviving parents, then siblings. Nothing will go to the family of the older joint tenant who died first. See my earlier post here about survivorship of the younger person.

Q: Does a joint title change to tenancy-in-common if one of the joint owners remarries?
A: Nothing is going to happen automatically if one remarries. The title will stay the same until the joint owners both sign documents to bring about a change. One can't do it on his or her own. Remarriage on its own won't change anything. If this question refers to a house that was the matrimonial home and now the couple is splitting up, I assume that the house will be dealt with in the subsequent property division. In other words, you'll divide everything up and one of you will get the house. As part of that agreement, you'll both sign a Transfer of Land document that transfers the house to one owner only.