Joint ownership of property is increasingly a source of family
disputes. Older people commonly put assets into joint
ownership with their children hoping to minimize probate fees or
other taxes. A recent decision of the Ontario Superior
Court, Schwartz v.
Fuss, shows just how much trouble joint ownership can
cause if it's not properly documented and implemented. In
the Schwartz case, siblings argued over the sale of a Florida
property that had been transferred into joint ownership between an
elderly women ("Mom") and an adult daughter
("RS"). RS wanted a dwindling line of credit to be
increased to cover Mom's care costs while her siblings felt the
Florida property should be sold. The Ontario Judge established that
firstly he had authority to issue a judgment on a property in
Florida and secondly, that the Pecore and Madsen Estate decisions would be applicable in
this case. The law presumed that RS held title to the condo
subject to a "resulting trust" for her mother. RS
was unable to "rebut" that presumption, so the Judge
ordered that she did not own the condo, and therefore could either
buy it from her mother at the price he set or co-operate with a
sale to a third party. The Judge also had to sort through a
claim from RS's brother and sister that RS should have to pay
"occupation rent" for her exclusive use of Mom's
Florida condo over a period of years, and a claim from RS for
reimbursement of renovation and carrying costs that she had paid on
her mother's behalf. The Judge resolved these
complaints, ordering that the occupation rent was offset by the
carrying costs paid by RS and that RS was entitled to be reimbursed
for only some of the renovation costs. The Judge also awarded
costs of $70,000 to RS's brother and sister.
Important lessons from this case include:
Approach joint ownership carefully, otherwise it can result in
When a person transfers an asset into joint ownership he should
carefully and fully document what he intends, e.g. if he really
intends the joint owner to be a full owner this should be
documented with a lawyer's assistance.
With joint ownership of real property it is equally important
to document who is responsible for the ongoing costs of repair and
It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
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