I receive a telephone call at least once a week asking “What do I have to do to put my kid’s name on title to my home?”
I know from past experience that the reason people want to do this is to avoid probate fees, which are payable if you have to make a Court application to the Supreme Court of British Columbia following a death. Probate fees can be expensive. For example, if your home is valued at $1,000,000, those fees are $14,000!
People sometimes say, “I want to put my daughter Debbie’s name (but none of my other children) on title because she moved in and now takes care of me.” They think that this is a way to prefer and benefit one child to the exclusion of the others.
It is fairly easy (and not expensive) for us to prepare, attend upon execution, and file documents at the land title office to transfer your home into the names of you and your children as joint tenants. That way, the property will pass on your death without having to obtain probate.
At the outset, I want to emphasize that putting a child’s name on title means that you are transferring an interest to him or her. Before, you owned the home by yourself. Now you will own it with your child.
That raises many potential problems:
1. Breach of mortgage
If you have a mortgage, that mortgage will likely provide that you are in default if you transfer any interest in your home to anyone without the bank or mortgage company’s consent.
2. Tax issues
If the property was solely your principal residence for every year you owned it, you do not have to pay tax on the gain when you sell it. That is a great gift (and one of the only gifts) from our friends at Canada Revenue Agency! But how does it work when your children now hold an interest in your home? And how does it affect them if they also own a home?
3. Home Owner Grant
If your children own an interest in your home, you may not be able to claim the full amount of the home owner grant that reduces the amount of real property taxes you pay annually for your principal residence.
4. World War I
If your children’s names are on title, that means that things may become difficult if you ever want to sell it. You would need their consent. What if they do not agree with your decision to sell?
5. World War 2
There can be issues if you do not put all your children's names on title. There is well-established law that, in these circumstances, the child who holds an interest in your home holds it for all your children unless there is evidence to the contrary.
6. World War 3
If you put one of your children on title who subsequently separates from a spouse, that spouse has the right to claim an interest in your property.
As you can see, simply putting your child’s name on title may create more problems than it solves. It is important to meet with an experienced estate planning lawyer to discuss your particular circumstances and the alternatives to ensure that your children will ultimately get your home.
Our experienced estate planning lawyers can help with these matters. Contact us for an appointment at (604) 270-9571 or send us a message.