Ontario Estates & Wills
There are two types of ownership on properties. One is call “joint tenants,” and the other is “tenants in common”. What is the difference between the two? In most cases, joint tenancy is the most common for property as well as bank accounts etc. This means that on the death of one owner, the surviving joint owner automatically acquires your interest in the property. This is known as the “right of survivorship.” Sometimes persons joining together to offer 1st and 2nd mortgages have a joint tenancy arrangement as well. Also it is common for bank accounts to be opened under joint tenancy,
In cases like the above, the interest in the bank accounts, mortgage holdings and the property will not be part of the estate of a joint owner who has passed therefore it is not provided to the beneficiaries named in the persons will.
Tenants in Common
Again there are the two options for Co-owners of property. I have already briefly described “joint tenants” and generally both persons would be on title of property together and they normally share identical rights of possession because for legal purposes they are considered as a single owner . On the other hand, Tenants in common most likely will have different proportions or shares of the property. The key part of Tenants in Common is that when one party passes away, their interest in the property will fall into the estate of that deceased person. The proceeds will then be distributed in accordance with the deceased persons will. It is not passed by the right of survivorship.
Advantages and disadvantages of joint tenancy
In joint tenancies, the property does not become part of the estate therefore it is not subject to probate to change the registration of title nor is it subjected to any claims from creditors.
A key thing to remember for those who decided to add their childs name to their title I that you have given away part ownership of your property as well part of the value of the property. It is also no longer in your full control and it could become an issue for claims from spouses via matrimonial law guidelines etc. You are also unable to sell unless all parties on title agree so you are limited on what you can do if you decide to dispose of the property.
Income tax is also a consideration unless the property is a principle residence but it is recommended that before making any of these decisions, it is advisable to speak with an estate lawyer and accountant.
Learn More and Hire a Professional
Creating a joint tenancy is a huge decision, equally ending a joint tenancy is as well. Will, Powers of Attorney, or other estate issues are best to be handled through a Wills & Estate lawyers
This quick overview is only to provide some general information. We have had many situations when it comes to estate sales and it is much better for everyone to have as much information at hand as possible.