# Joint tenancy ... experiences?



## rikk (May 28, 2012)

I'll go talk to my lawyer eventually ... in the meantime ... I'm considering a "joint tenancy" of the house ... myself, my wife, and my son. Any real life experiences to share? Thanks ...


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## MoneyGal (Apr 24, 2009)

Why your son?


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## carverman (Nov 8, 2010)

Everything is ok with that, until the son moves away and the house is no longer his principle residence. In that case if the house was sold because you and your wife
want to sell, there is capital gains payable on the son's portion, because it is no longer his principle residence. 

I have joint tenancy with my mother, who's name is on the deed because of my divorce to protect me from my ex at the time of purchase, because we were not legally
separated nor divorced yet. 
Problem is that my mother has never lived in it. She lives in Toronto. I found out last year that when she passes, her estate has to pay capital gains on her share of my house. 
If I pass before her, she gets 100% ownership of my house and property.


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## rikk (May 28, 2012)

carverman said:


> Everything is ok with that, until the son moves away and the house is no longer his principle residence. In that case if the house was sold because you and your wife
> want to sell, there is capital gains payable on the son's portion, because it is no longer his principle residence.
> 
> I have joint tenancy with my mother, who's name is on the deed because of my divorce to protect me from my ex at the time of purchase, because we were not legally
> ...


Thanks ... pretty much as I've been able to find so far ... that there may be capital gains consequences. Chances are higher that my wife and I will be the ones moving away  I'm looking into it as an estate planning mechanism ... tbd. My understanding, there's the risk that if one participant gets into financial difficulty the house could be at risk ... all very interesting.

To complete the picture I should add the house comprises two separate living spaces ... we're fine with that and we're good with where the house is at


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## MoneyGal (Apr 24, 2009)

It's a cruddy estate planning mechanism (in fact, it is more than likely not an actual "estate planning" strategy, just a probate avoidance tactic). We just discussed that issue recently.


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## rikk (May 28, 2012)

MoneyGal said:


> It's a cruddy estate planning mechanism (in fact, it is more than likely not an actual "estate planning" strategy, just a probate avoidance tactic). We just discussed that issue recently.


We? Where? ... thanks


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## MoneyGal (Apr 24, 2009)

I was thinking of this thread: http://canadianmoneyforum.com/showt...-question-on-mother-s-condo?highlight=probate


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## marina628 (Dec 14, 2010)

Something to think about when transferring property to children's name .Our friends did this a few years ago ,put their son on their cottage to avoid eventual probate taxes I suppose.Unfortunately their son was killed in a car accident before he was 30 and he had no will but a wife .They spent a small fortune trying to get their own cottage back and eventually had to settle and give 50% of the value to their daughter in law.


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## rikk (May 28, 2012)

MoneyGal said:


> I was thinking of this thread: http://canadianmoneyforum.com/showt...-question-on-mother-s-condo?highlight=probate


Hi ... thanks ... probate fees was not the consideration ... money is not the consideration ... my goal was to simplify estate planning such that on my demise the house simply transfers to my wife and my son. I've been through a will being contested ... not fun. As pointed out here, and from some reading, what if my son divorces ... his wife would then be entitled to half his share ... and on and on go the scenarios. I'm in no hurry ... just asking for joint tenancy experiences, thanks to all so far.


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## carverman (Nov 8, 2010)

rikk said:


> As pointed out here, and from some reading, what if my son divorces ... his wife would then be entitled to half his share ... and on and on go the scenarios. I'm in no hurry ... just asking for joint tenancy experiences, thanks to all so far.


Not sure about that. From my experience, yes in case of a marital home, the ex wife gets 50% of the equity in the marital home. If your son is listed as a joint tenant on your principle residence and you are still living there, then there is no sale and no money/profits realized from the sale of your home, so I can't see how (in this case a hypothetical case) the wife (or ex-wife as the case may be) gets 50% of his 1/3 share of your principle residence.


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## rikk (May 28, 2012)

carverman said:


> Not sure about that. From my experience, yes in case of a marital home, the ex wife gets 50% of the equity in the marital home. If your son is listed as a joint tenant on your principle residence and you are still living there, then there is no sale and no money/profits realized from the sale of your home, so I can't see how (in this case a hypothetical case) the wife (or ex-wife as the case may be) gets 50% of his 1/3 share of your principle residence.


Hi ... the legal term is "joint tenancy" meaning equal owners. My son lives in the home so the home as far as his wife's lawyer would be concerned, would be matrimonial I would think ... questions like these I will be asking my lawyer ... I'm asking about real life experience with "joint tenancy".


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## carverman (Nov 8, 2010)

rikk said:


> Hi ... the legal term is "joint tenancy" meaning equal owners. My son lives in the home so the home as far as his wife's lawyer would be concerned, would be matrimonial I would think ... questions like these I will be asking my lawyer ... I'm asking about real life experience with "joint tenancy".


If your son's wife lives with him in your home, but is not listed on the title deed, then it's a little more complicated, because it's not really a matrimonial home in the legal sense that she has equal rights to it..
as it is your matrimonial home, so you and your wife have equal share in it. 

Adding your son will add some complexity to who's entitled to what share of it, if there is a split in either marriage..yours or your son's. 
I'm not suggesting that would happen..just a hypothetical case of course..but adding a third party to a title deed can lead to problems
contesting rightful ownership in a worse case scenario.


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## rikk (May 28, 2012)

carverman said:


> If your son's wife lives with him in your home, but is not listed on the title deed, then it's a little more complicated, because it's not really a matrimonial home in the legal sense that she has equal rights to it..
> as it is your matrimonial home, so you and your wife have equal share in it.
> 
> Adding your son will add some complexity to who's entitled to what share of it, if there is a split in either marriage..yours or your son's.
> ...


Yep ... but I do have the choice of doing nothing ... joint tenancy is just an option I'm exploring.


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## MoneyGal (Apr 24, 2009)

*Whether or not it is the matrimonial home*: Upon divorce, there is an equalization of property. The son has an ownership interest in this property. Depending on when he acquired it and if it has increased in value from the date of acquisition/date of marriage, a divorcing spouse will owe one-half of the increase in value to his or her ex-spouse. 

*If the son and spouse are living in the house and the son divorces, it IS the matrimonial home*. Ontario Family Law Act specifies that the matrimonial home is _Every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence is their matrimonial home. R.S.O. 1990, c. F.3, s. 18 (1)._

(Note: Family law is similar across Canada w/r/t the matrimonial home)

As a further issue (and this is Ontario only; I don't know the rules on this point for other provinces) the Ontario Family Law Act provides that joint tenancies with third parties end at the dissolution of a marriage (quote from FLA): 

_Spouse without interest in matrimonial home: Joint tenancy with third person_26. (1) If a spouse dies owning an interest in a matrimonial home as a joint tenant with a third person and not with the other spouse, the joint tenancy shall be deemed to have been severed immediately before the time of death. R.S.O. 1990, c. F.3, s. 26 (1).


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## carverman (Nov 8, 2010)

MoneyGal said:


> *Whether or not it is the matrimonial home*: Upon divorce, there is an equalization of property. The son has an ownership interest in this property. Depending on when he acquired it and if it has increased in value from the date of acquisition/date of marriage, a divorcing spouse will owe one-half of the increase in value to his or her ex-spouse.


This would make it very nasty if there was a divorce, requiring either sale or coming up with funds to make the equalization payment. I would call this "insanity" in both the family law and living arrangements.



> *If the son and spouse are living in the house and the son divorces, it IS the matrimonial home*. Ontario Family Law Act specifies that the matrimonial home is _Every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence is their matrimonial home. R.S.O. 1990, c. F.3, s. 18 (1)._


Very nasty indeed if there is any problems with people getting along in the same home! 
Another reason for a pre-nupt or a contract signed by both parties before co-habiting with the parents, who are also co-owners.



> (Note: Family law is similar across Canada w/r/t the matrimonial home)
> As a further issue (and this is Ontario only; I don't know the rules on this point for other provinces) the Ontario Family Law Act provides that joint tenancies with third parties end at the dissolution of a marriage (quote from FLA):


\

I would be seeking a lawyer's advice on this..but even lawyers don't always have the right answer when it comes to how the courts divide up marital property.
This is very nasty business..something that requires both a pre-nupt or a contract that the wife of the son (in this case) will not have any rights to the son's joint tenancy with the parents. 

If what you say (above) is true..this is insanity in the family law provisions. A wife that does not contribute any funds to the marital home owned by the parents of the son and the son, should not have any right to seek interest in that property..otherwise it's just gold digging!


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## rikk (May 28, 2012)

MoneyGal said:


> *Whether or not it is the matrimonial home*: Upon divorce, there is an equalization of property. The son has an ownership interest in this property. Depending on when he acquired it and if it has increased in value from the date of acquisition/date of marriage, a divorcing spouse will owe one-half of the increase in value to his or her ex-spouse.
> 
> *If the son and spouse are living in the house and the son divorces, it IS the matrimonial home*. Ontario Family Law Act specifies that the matrimonial home is _Every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence is their matrimonial home. R.S.O. 1990, c. F.3, s. 18 (1)._
> 
> ...


Hi ... thanks for your research ... I've no problem with any of the above, I've been through a divorce ... my assumption is that once the papers are signed I have waved goodbye to 2/3 of the house ... period (I'm not expecting my wife or son to die before me). It's interesting how these agreements can be severed ... even without the other "partners" knowledge ... geez in some cases I read even intent to severe was interpreted by the courts as severed.


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## MoneyGal (Apr 24, 2009)

The issue (in my view) is not your wife or your son, but a potential future ex-spouse of your son. As in: you can agree with "signing away 2/3rds of [the value of] the house" -- but the implication is that you'd also be setting up a structure by which your wife is signing away a portion of HER ownership after you pass away (in the event of a divorce from her son).


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## rikk (May 28, 2012)

MoneyGal said:


> The issue (in my view) is not your wife or your son, but a potential future ex-spouse of your son. As in: you can agree with "signing away 2/3rds of [the value of] the house" -- but the implication is that you'd also be setting up a structure by which your wife is signing away a portion of HER ownership after you pass away (in the event of a divorce from her son).


Well then there would be 2 left in the joint tenancy, and they could decide (severe the agreement) how they'd like to divvy up the house ... my assumption is that my son would buy out my wife (fwiw my son is not my wife's son ... not a plain vanilla marriage ... it's more complicated but no need to discuss here) who would prefer go live in less complicated housing ... or they might just sell.


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## MoneyGal (Apr 24, 2009)

Yabbut IF your son is married AND he divorces his spouse after your passing (and before the house is otherwise "divvied up"), your son and your wife cannot decide how they'd like to divvy up the house: the divorce will force a resolution and it will include the ex-spouse.


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## rikk (May 28, 2012)

MoneyGal said:


> Yabbut IF your son is married AND he divorces his spouse after your passing (and before the house is otherwise "divvied up"), your son and your wife cannot decide how they'd like to divvy up the house: the divorce will force a resolution and it will include the ex-spouse.


That's a mighty big IF, missie (spoken with a John Wayne accent) ... enjoy the day :encouragement:


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## MoneyGal (Apr 24, 2009)

Lol! It's one of those things that's a giant, costly bummer if it happens. We talk about all of those kinds of issues here on this board; I thought it was appropriate to raise. "What's the risk?" Well, that is one risk. :chuncky:


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