Does joint ownership avoid probate in Canada?
Joint tenancy with right of survivorship passes the asset directly to the surviving joint owner outside the estate, so it avoids probate (estate administration tax) on that asset. However, adding a joint owner can trigger capital gains tax, family-law claims, creditor exposure, and disputes, so it is not always worthwhile.
What is the Pecore resulting trust risk?
In Pecore v. Pecore (2007), the Supreme Court of Canada held that when a parent gratuitously puts an adult child on title as a joint owner, there is a presumption of resulting trust: the child is presumed to hold the asset in trust for the parent's estate, not as a true gift, unless there is clear evidence the parent intended a gift. This is a major source of estate litigation.
Does adding a joint owner trigger capital gains tax?
It can. Adding a non-spouse joint owner to appreciated property (other than a principal residence) may be treated as a partial disposition of a 50% interest at fair market value, triggering capital gains tax on the transferred portion. Transfers to a spouse roll over tax-free.
Is joint ownership a good probate strategy?
It can save probate fees but carries real risks: loss of control, exposure to the co-owner's creditors and divorce, unintended disinheritance of other beneficiaries, and litigation over whether a gift was intended. For many families a beneficiary designation or trust is safer. Get advice before adding anyone to title.