Joint ownership of houses, bank accounts, investments | Miltons (2024)

Joint ownership with spouse = likely good;

Joint ownership with adult child = very risky!

If you own an asset (for instance a house or bank account) in joint tenancy with a right of survivorship with your spouse then on your death 100% of that asset should belong exclusively to the other joint owner. The asset will not be part of your estate, and no probate is necessary.

This can be a very efficient and effective way to hold assets, especially with your spouse (whether married or common law).

However, joint ownership with an adult child is a whole other matter:

• Unless the child can prove that you intended to give the asset to them, the asset is deemed to form part of your estate and is subject to probate. Jointly owned bank accounts and houses are an invitation for family disputes and expensive litigation. If you really want to make a gift to an adult child, you absolutely must document your intention, and better yet, you should probably give them the asset outright and not retain a joint interest in it.
• A lot of nasty income tax consequences can be triggered from a poorly documented gift to an adult. For instance, if you truly give your house to your child and they do not live in it, then you can no longer claim the principle residence exemption for sheltering from capital gains taxes, any increase in its value after the date of gift.
• A jointly owned asset is truly jointly owned – the child can take it or spend it at any time, and it can be seized by their creditors (including their ex-spouses) to pay their debts.

Much more on joint ownership (especially with adult children) can be found here: