Joint tenancy
Joint tenancy is often used for estate planning purposes so that assets transfer without the need to probate a will. The term "joint tenancy" refers to a legal arrangement in which two or more people own a property together, each with equal rights and obligations.[1] The legal relationship creates what is known as a right of survivorship so if one owner dies, their interest in the property is directly passed on to the surviving party(s) without having to go through probate or court system.[1]
Advantages and disadvantages
There are advantages and disadvantages of using this structure. There are two basic types of joint ownership: tenancy-in-common and joint tenancy with right of survivorship (JTWROS). The latter is not recognized in Quebec.[2]
Tenants-in-common
Tenants-in-common share a specified portion, equal or unequal, of ownership rights in assets. Upon the death of a tenant-in-common, their portion forms part of their estate to be distributed under their will or on intestacy.[2]
Joint tenancy with right of survivorship
In a JTWROS, two or more people each own an undivided interest in the whole asset. Joint tenants share equal ownership and have equal rights to keep or dispose of the property. On the death of a joint owner, the assets go to the surviving joint tenant or tenants, not to the deceased joint owner’s estate.[2]
See also
References
- ^ a b "What Is Joint Tenancy in Property Ownership?". Investopedia. November 16, 2021. Retrieved 2023-01-16.
- ^ a b c Elaine Blades (November 13, 2012). "Don't take these shortcuts". Advisor.ca. Retrieved January 10, 2017.
Further reading
- Financial Wisdom Forum topic: "Joint title on investment account?"
- Financial Wisdom Forum topic: "questions after death: bank accounts/life insurance" - In Québec, a joint account is frozen upon the death of one of the joint account holders.
- Financial Wisdom Forum topic: "Joint accounts and joint tenancy"
External links
- Lynne Butler (January 22, 2010). "Joint tenants vs. tenants-in-common". Estate Law Canada blog.
- Floyd Gradley (June 2, 2011). "The pitfalls of joint tenancy". Advisor.ca.
- Tim Cestnick (September 10, 2012). "Why you should think twice about joint ownership". The Globe and Mail.
- Jason Heath (May 10, 2016). "Joint tenancy vs. tenants in common". MoneySense.
- "What every older Canadian should know about: Powers of attorney (for financial matters and property) and joint bank accounts". Government of Canada. 2016-10-24.
- Marcia Green (December 19, 2013). "Estate Planning - Jointly Held Assets - Nelligan O'Brien Payne LLP".
- "Joint accounts". Financial Consumer Agency of Canada.