Often clients ask me if they should put their home in joint tenancy with their children in order to avoid probate fees.

In B.C. probate fees are approximately 1.4% of the value of the home so there can be considerable savings particularly given the recent dramatic rise in the value of houses.

Placing your home in joint names with your spouse is usually a good idea but with children there are several reasons not to place the home in joint names:

1. Transferring an asset to one’s children is a deemed disposition under the Income Tax Act. A principal residence is tax exempt but any other property would have accrued capital gains which would immediately become payable if the property is transferred. Also, if you transfer one-half of your principal residence to a child you will lose the principal residence exemption on that half of the property when it eventually sells.

2. If you transfer one half of your property to your child, they own it and you will have lost control over the property.

3. If your child is sued at a later date (for example in a divorce), their interest in the property can be at risk.

4. If your child has to declare bankruptcy, their interest in the property may be required to pay their creditors.

For all of these reasons I usually advise clients not to put property in joint names with their children. It’s often safer to let your estate pay the probate fees on your death. The exception to this is if a parent is certain they are dying, transferring all of their assets to their children immediately prior to their death may save significant probate fees.


Deborah A. Todd