Estate Planning – Considerations when Adding a Child as Joint Tenant to your Property

Many parents put their children on title to their residence as a form of estate planning. While this can help avoid probate fees and possibly assist with ease of administration of an estate, the case of Gully v. Gully, 2018 BCSC 1590 [Gully], demonstrates that parents must be careful when adding children onto title to their residence.

In Gully, a mother added her son as a joint tenant on title to her Burnaby property. She did so based on legal advice she received, including that her estate could avoid probate fees. She did not tell her son that he had been added as a joint tenant to title of the property.

In August of 2017, the son, and his company, consented to a judgment of $800,000.00 in favour of Ledcor Construction Limited (“Ledcor”). Ledcor discovered that the son was on title to the property and registered their certificate of judgment on the son’s undivided half interest in the property.

The mother sought a declaration, amongst other things, that the son held the property on a resulting trust for her estate. The court found that the son did not hold the property on a resulting trust for the estate and permitted Ledcor to retain their judgment on title, ultimately stating:

 [24]        Ms. Gully took a risk in registering her son as a joint tenant on her property. Whether she was properly advised of that risk is not before me. However, once she made the decision to register an interest in the Burnaby Property in Mr. Gully’s name, third party creditors of Mr. Gully became entitled to register judgments against Mr. Gully’s interest in the Burnaby property.

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The recent Alberta court decision in McLeod v McLeod addressed the issue of whether season tickets to the Edmonton Oilers that were in the name of only one spouse was part of the marital property.

In this case the couple had determined an acceptable amount for spousal support and were proceeding with a divorce. However, the divorcing couple could not reach an agreement on how to divide their beloved Oilers season tickets. As the divorce would not be finalized for some time, and the hockey season was quickly approaching, the wife applied to court for an interim property order. An interim order is a temporary order that is made before the divorce is granted.

The tickets were only in the husband’s name and the couple had used them for 11 years, primarily for family enjoyment. The husband refused to allow the wife to use any tickets for the 2017/2018 season, arguing that they were not part of the matrimonial property because, as a season ticket holder, he was only entitled to a right to purchase the tickets. Despite this argument, the Court held that the season tickets were matrimonial property and would have to be shared between the separating couple.

The Court ordered that, for the 2017/2018 season, the couple had to equally share the season tickets. Under the terms of the Court order, the couple were required to alternate choices for game tickets, including playoff tickets.

 

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