Top 5 Risks Every Joint Owner Should Know

Joint ownership, even with family, can create legal problems. Here are five dangers that you must be aware of. Review this list before you consider holding property in joint ownership with anyone, including your children.

1. Disaster
Joint owners can refuse to cooperate when you need to deal with the property.

2. Death
Your child could die first, or at the same time, which means you must plan for other contingencies with your will.

3. Divorce
Divorced spouses of a child can make a claim to the property. This can drag you into a court battle to prove you intended to make an undocumented gift.

4. Debts
Creditors of bankrupt children can make claims against property. Creditors can sue and force a sale of joint assets.

5. Disposition
Transfers of some assets can create a capital gain and other expenses.

Always discuss with your own, independent lawyer the advantages and disadvantages of having jointly owned assets. Consider the risks carefully before you give up control of your assets. Once someone is a joint owner, you often can’t remove him or her as a joint owner without that person’s consent. If consent is not forthcoming, you could end up in a court fight.

Trying to avoid Ontario provincial estate administration taxes (EAT) with joint ownership can cause disasters if you end up in court. Paying EAT to the Ontario Minister of Finance may be a cheap price to pay. You also control your own money and stay out of court.

Have questions about joint ownership? Book a meeting today to discuss your options. If you may benefit from a second opinion, let me help you today. Set up an initial meeting to discuss your plans.

As a Certified Specialist, estate law is all I do.