Loss of Control & Creditor Exposure

Jared Pilon

In recent years, probate planning has become a more recognized topic in estate planning discussions. This is due to the increases in probate fees in jurisdictions such as Ontario. In many provinces however, probate fees are essentially NIL. Even when considering provinces with ‘high probate fees’, the costs associated with probate planning may outweigh the fees incurred.

Loss of Control

When you add a joint owner to an asset, you give up control of this asset. This results in a hindrance in the process of mortgaging or selling the property in comparison to when you were the sole owner.

This can lead to tension and unintended stress that many individuals do not carefully plan for. One such scenarios is when a parent adds multiple children as joint owners on a property and when the time comes to sell the asset, the children refuse to consent.

If you are ready to give up control of an asset, it is likely better to sell or gift the asset instead. This will remove any potential complications from holding the asset in joint title. An asset should never be transferred to joint title with a minor as the court would generally be required to manage the minor’s interest in the property.

Care should be taken when adding a joint owner to a bank account as there is a risk that this individual could remove all of the funds from your account.


Creditor Exposure

When a joint owner is added to an asset, it is possible for a creditor of the new joint owner to make a claim against the asset in the future. Sometimes an argument can be made that the new joint owner is only acting as a trustee. Unfortunately, the court may not agree with your position on this matter.

If a joint owner was added to real property (fixed property – land & buildings), the argument of a trustee relationship may not matter if the creditor is able to register a lien against the property.



As we can see from these case studies, efforts to avoid probate fees can have drastically negative tax, distribution and equalization consequences. Instead of completing probate planning in a silo, it is important to consider your entire estate when making decisions. This will allow you to plan accordingly to protect your assets, minimize tax and preserve your legacy.



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Posted: 1/16/23