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Does Joint Tenancy Save Probate Costs?

We get asked by clients on occasion to transfer property from 1 or 2 names into 2, 3 or more so as to save on probate costs. People have read horror stories about this and are hoping to avoid those issues.

Alberta Probate Fees

The good news is that Alberta’s probate fees are amongst the lowest in the country and are not based on a percentage of the estate. In fact, they top out at $525 once the $250,000 level is reached. In other provinces like Ontario and BC there is a percentage charged so that is certainly a bigger consideration.

That means for Alberta the question becomes whether it adds to the convenience of the process. In some cases it certainly can but then there are other factors that come into play. For example, where there are multiple beneficiaries under a will, putting a property into joint ownership with one of them can cause a serious problem. When something is held jointly the title to that thing passes outside of the estate to the surviving person or persons. It means that any other person who is not on title has not benefited from the estate.

This can be dealt with in your Will but that is a complex situation that has to be specifically addressed in your Will. We can establish specific gifts to specific people to offset this situation but that is also a potential problem if your estate does not grow in the way you expect.

Presumption Of Resulting Trust

There are some side notes to this whole debate which focus on what is called the “presumption of resulting trust” rule that Canadian courts have established.

Effectively, this rule states that there is an assumption that transfers of title to non-spouses to be jointly held create a “trust” and the other party added only holds that title as trustee for the original owner. In a nutshell, the courts have ruled that sometimes a joint account really wasn’t intended to be truly joint and that it was done for convenience only.

A good example of this is where mom or dad are elderly, they have 3 or 4 kids and they add 1 of them (who lives close by) to their bank accounts to make it easier to deal with bills, etc. There was no real intention to have that 1 child get all of the money from that account if mom or dad pass away – the intention was just to make it easier to administer so the account was not truly “joint”.

This can be overridden by evidence to the contrary so you have to be very careful to ensure that what you want to happen is actually going to happen with the property.

In the simplest of terms, establishing a joint tenancy can be a minefield based on intentions and actual steps taken and why it is best to consult us prior to making or executing on any decisions.

For more information regarding real estate law, we are Calgary’s leading legal real estate team to help you. Contact us today, 403 245 – 3500, or email us at info@calgarylaw.com.