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Joint Tenancy: What is it, and is it right for me?

Updated: Jan 16

One of the most common estate planning topics that people ask us about is joint tenancy planning. Often, spouses own many of their assets jointly, and for real estate ownership, that usually means joint tenancy ownership.


Joint tenancy is a type of ownership where two or more people own a property together. When one owner dies, their ownership transfers to the remaining living owners by the right of survivorship. The right of survivorship transfer is a relatively simple process and does not involve the courts or paying property transfer tax.


Since a survivorship transfer is so straightforward, it can be used in estate planning by parents to transfer property to their children or others by adding them as joint tenant owners while the parents are alive. This will result in a transfer of ownership to the children upon the death of the parents, without having to go through the probate process and paying probate fees. However, there are both pros and cons to using joint tenancy as part of your estate planning strategy.


Pros of Joint Tenancy Estate Planning for Parents


  • Avoidance of probate: One of the main benefits of joint tenancy is that it allows you to avoid the probate process. This can save your family time and money, as probate can be a lengthy and costly process.

  • Immediate transfer of ownership: When one joint tenant passes away, their ownership interest in the property automatically transfers to the other joint tenants. This means that your children can immediately take ownership of the property without having to go through probate.

  • Protection from creditors: Joint tenancy can also provide protection from creditors. If one joint tenant is sued or owes money, their creditors cannot go after the property held in joint tenancy.

  • Control over property: While both joint tenants have equal ownership rights, you can specify in a joint tenancy agreement how the property will be distributed upon your death. This can give you some control over how your property is managed after you're gone.


Cons of Joint Tenancy Estate Planning for Parents


  • Loss of control: When you transfer ownership of your property into joint tenancy, you give up some control over it. You cannot sell or mortgage the property without the consent and signatures of the other joint tenant(s).

  • Potential for conflict: Joint tenancy can also create the potential for conflict among family members. If one joint tenant passes away, their ownership interest automatically transfers to the surviving joint tenants. This can create resentment and disputes if some family members feel they are not getting their fair share.

  • Tax implications: Joint tenancy can have tax implications, particularly if the property is sold or transferred after the death of one or more joint tenants. It's important to consult with a tax professional to understand the potential tax implications of joint tenancy.

  • Lack of flexibility: Joint tenancy is a relatively inflexible estate planning tool. Once the property is transferred into joint tenancy, it can be difficult to undo or change the arrangement if circumstances change.

In conclusion, joint tenancy can be a useful tool for parents in British Columbia who are looking to transfer ownership of their property to their children and avoid the probate process. However, it's important to consider the potential drawbacks of joint tenancy, including loss of control, potential for conflict, tax implications, and lack of flexibility. It's important to consult with an estate planning lawyer to determine whether joint tenancy is the right option for your specific circumstances and to ensure that your estate plan is tailored to your unique needs and goals.


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