Joint Tenancy

Property held in joint tenancy normally becomes the property of the surviving joint tenant(s) when another joint tenant dies. An exception in Ontario arises where the property was the deceased’s matrimonial home and the spouse of the deceased was not one of the joint tenants. In that case, the interest of the deceased is treated as if he or she were a tenant in common; instead of passing to the other joint tenants, it passes into the estate of the deceased. Joint tenancies may be broken by mutual agreement or

even by the action of one of the joint tenants. A joint tenant who secretly registers a deed to himself or herself successfully breaks the joint tenancy. Seniors often arrange to transfer to themselves and one of their children as joint owners as a way to save on probate fees. There is usually a verbal understanding that the child is to act in a trustee capacity, but nothing specific in writing. There can be income tax implications of this arrangement. Moreover, if the child develops financial or matrimonial difficulties, or isunderstands the nature of the verbal trust, the intentions of the seniors may be frustrated. It is important that a lawyer be consulted before such a transfer is undertaken.