1. What Does Joint Tenancy Mean?

2. Joint Tenancy vs. Tenants in Common

3. What Does Alberta Law Say?

4. How the Right of Survivorship Works

5. When Is Joint Tenancy Appropriate?

6. When Might Joint Tenancy Not Be Appropriate?

7. Should You Add Your Child to Title?

8. Does Joint Tenancy Always Avoid Probate?

9. Coordinating Joint Tenancy With Your Estate Plan

10. Common Mistakes to Avoid

11. Costs and Considerations

12. When Should You Speak With an Estate Planning Lawyer?

13. How Bridgestone Law can Help

Introduction

For many Albertans, purchasing a home is one of the most significant financial decisions they will ever make. When completing the purchase, they are often asked a question that seems straightforward:

"Would you like to own the property as joint tenants or tenants in common?"

Many people simply follow a recommendation or assume the answer does not really matter.

In reality, the way property is owned can have a significant impact on what happens after one owner dies.

Joint tenancy is a form of co-ownership that generally includes a right of survivorship.

When one joint tenant dies, their interest in the property usually passes automatically to the surviving joint tenant rather than through the deceased's estate.

Although this can simplify the transfer of property in many situations, joint tenancy is not appropriate in every case.

It may affect:

• your overall estate plan;

• probate;

• your will;

• tax consequences;

• family expectations;

• creditor issues; and

• how your property is ultimately distributed.

Because of these considerations, joint tenancy should be viewed as one estate planning tool among many rather than a one-size-fits-all solution.

What Does Joint Tenancy Mean?

Joint tenancy is a legal form of ownership in which two or more people own the same property together.

The defining feature of joint tenancy is the right of survivorship.

This means that if one joint tenant dies, their ownership interest generally passes automatically to the surviving joint tenant or tenants.

Unlike property owned solely by the deceased, the interest passing by survivorship generally does not become part of the estate available for distribution under the will.

This is one of the reasons joint tenancy is commonly used between spouses who own their family home.

Joint Tenancy vs. Tenants in Common

Although both are forms of co-ownership, they operate very differently.

Joint Tenancy

With joint tenancy:

• each owner owns the whole property together;

• the owners have equal interests;

• the right of survivorship generally applies; and

• the deceased owner's interest usually passes automatically to the surviving owner.

Tenants in Common

With tenants in common:

• each owner owns a separate share of the property;

• ownership percentages may be equal or unequal;

• there is no automatic right of survivorship; and

• each owner's share generally forms part of their estate upon death and is distributed according to their will or Alberta's intestacy laws if no valid will exists.

Understanding this distinction is essential when making estate planning decisions involving real estate.

What Does Alberta Law Say?

Joint ownership of land in Alberta is governed primarily by the Land Titles Act, together with general principles of property law.

When a property is properly registered as joint tenancy, the surviving owner will generally become the sole owner upon the death of the other joint tenant through the operation of the right of survivorship.

However, determining whether property truly passes by survivorship can sometimes involve more complex legal issues, particularly where:

• ownership was added later in life;

• one owner contributed all of the purchase funds;

• family members are added to title for convenience;

• questions arise regarding the deceased's intentions; or

• disputes develop among beneficiaries.

Because every situation is different, the legal effect of joint ownership should be considered within the context of the owner's overall estate plan.

How the Right of Survivorship Works

The right of survivorship is the defining feature of joint tenancy.

When one joint tenant dies, their ownership interest generally passes automatically to the surviving joint tenant by operation of law rather than through the deceased's will.

For example, imagine that John and Mary own their Calgary home as joint tenants.

When John dies, his ownership interest will generally pass directly to Mary. Instead of John's share becoming part of his estate, Mary becomes the sole owner of the property once the appropriate Land Titles documentation has been completed.

This process is often simpler than transferring property through an estate, but it is important to remember that the surviving owner will still need to complete the required legal steps to update the title.

Although the right of survivorship can be a valuable estate planning tool, it should never be assumed that it will achieve every estate planning objective.

When Is Joint Tenancy Appropriate?

Joint tenancy is commonly appropriate in situations where the owners intend that the surviving owner should automatically become the sole owner of the property.

Examples often include:

• married spouses;

• Adult Interdependent Partners;

• long-term partners purchasing a family home together; and

• individuals who genuinely intend equal ownership with the right of survivorship.

For many couples, joint tenancy provides certainty and continuity.

The surviving spouse can generally continue owning the home without first receiving the property through the deceased's estate.

However, even in these situations, joint tenancy should still be considered alongside the person's overall estate plan to ensure it supports their long-term objectives.

When Might Joint Tenancy Not Be Appropriate?

Joint tenancy is not always the best solution.

In some situations, it may create unintended legal, financial, or family consequences.

For example:

• you wish your share of the property to pass to your children rather than the surviving owner;

• you own the property with siblings or business partners;

• you are purchasing investment property;

• you are part of a blended family;

• you wish to leave unequal gifts to beneficiaries;

• there are creditor concerns;

• tax considerations may arise; or

• the property forms part of a more complex estate plan.

In these situations, ownership as tenants in common may better reflect your intentions.

Every family's circumstances are different, and ownership should be selected only after considering your broader estate planning goals.

Should You Add Your Child to Title?

Parents sometimes consider adding an adult child to the title of their home in the belief that doing so will automatically avoid probate.

While that may seem attractive, it is rarely a decision that should be made without obtaining legal and tax advice.

Adding another person to title can affect:

• ownership rights;

• creditor exposure;

• family expectations;

• tax consequences;

• future property transactions;

• matrimonial or family property issues involving the child;

• eligibility for certain tax exemptions; and

• the overall administration of your estate.

In some situations, adding a child to title may also create uncertainty regarding whether the parent intended to make a gift of the property or whether the child was added for convenience only.

Because these situations are highly fact-specific, professional advice is strongly recommended before changing property ownership.

Joint Bank Accounts Are Different

Many people assume that joint bank accounts and jointly owned real estate always operate in exactly the same way.

Although both may involve rights of survivorship, they can raise different legal issues.

For example, parents sometimes add an adult child to a bank account to assist with paying bills or managing finances.

That administrative arrangement does not always mean the parent intended the child to receive the funds beneficially after death.

Similarly, adding someone to real estate title should not be viewed simply as a convenient administrative decision.

Real property often represents one of the largest assets in an estate and should only be transferred after careful consideration of the legal consequences.

Does Joint Tenancy Always Avoid Probate?

One of the most common misconceptions is that joint tenancy always eliminates the need for probate.

The answer is not necessarily.

If jointly owned property passes to the surviving owner through the right of survivorship, that particular property may not require probate in order to transfer ownership.

However, probate may still be required for other assets within the estate, such as:

• bank accounts held solely by the deceased;

• investment accounts;

• private corporation shares;

• vehicles;

• recreational property owned solely by the deceased;

• business interests; or

• other real estate held in the deceased's sole name or as a tenant in common.

Whether probate is required depends on the overall composition of the estate rather than on the ownership of one particular asset.

Coordinating Joint Tenancy With Your Estate Plan

Joint tenancy should never be considered in isolation.

Instead, it should work together with:

• your will;

• your Enduring Power of Attorney;

• your Personal Directive;

• beneficiary designations;

• trust planning, where appropriate;

• your tax planning strategy; and

• your overall estate planning objectives.

For example, your will may leave your estate equally among three children.

If your most valuable asset, your home, is jointly owned with only one child, the practical outcome may be very different from what your will appears to provide.

Reviewing all of your estate planning documents together helps ensure your property ownership reflects your intentions and minimizes the risk of future misunderstandings or disputes.

Practical Examples

Example One: Married Homeowners

David and Jennifer own their Calgary home as joint tenants.

When David passes away, Jennifer becomes the sole owner through the right of survivorship. With the assistance of a real estate lawyer, she updates the Land Titles records using the required documentation.

Because the property passed directly to Jennifer, it does not form part of David's estate for the purpose of transferring ownership. However, David's executor must still administer the remainder of his estate, including his bank accounts, investments, and other assets.

Example Two: Adding an Adult Child to Title

Margaret is widowed and owns her home outright.

A friend suggests adding her son to the title to "avoid probate."

Before making the change, Margaret seeks legal advice and learns that doing so could have unintended consequences, including affecting ownership rights, exposing the property to risks associated with her son's personal circumstances, and creating uncertainty among her other children about her intentions.

Instead, Margaret updates her estate plan in a way that better reflects her wishes while preserving flexibility during her lifetime.

Example Three: A Blended Family

Paul remarries later in life and owns his home jointly with his new spouse.

He also has two adult children from his first marriage.

Paul assumes his will, which leaves everything equally among his children, will determine who ultimately receives the home.

However, because the home is held in joint tenancy, the property generally passes directly to his surviving spouse through the right of survivorship rather than under the terms of his will.

A review of Paul's estate plan allows him to better understand how his property ownership and his will work together and whether additional planning is appropriate.

Common Mistakes to Avoid

Joint tenancy can be an effective estate planning tool, but misunderstandings about how it operates are common.

Assuming Joint Tenancy Is Always the Best Choice

Many people are told that joint tenancy is the "standard" way to own property.

While it is often appropriate for spouses, it may not be suitable for every family, investment property, or estate plan.

Ownership decisions should always be made in light of your overall objectives.

Adding Someone to Title Without Understanding the Consequences

Adding another person to title is more than an estate planning decision.

It changes legal ownership.

Before transferring any ownership interest, consider how the change could affect:

• your control over the property;

• future refinancing or sale;

• tax consequences;

• creditor exposure;

• family relationships; and

• your overall estate plan.

Assuming Your Will Controls Jointly Owned Property

Many people are surprised to learn that their will does not necessarily determine what happens to property held in joint tenancy.

Where the right of survivorship applies, the property generally passes directly to the surviving owner rather than through the estate.

Your will and your property ownership should therefore be reviewed together to ensure they reflect the same intentions.

Forgetting to Review Property Ownership

People's lives change.

Marriage, divorce, remarriage, purchasing additional real estate, or changes in family relationships may all affect whether joint tenancy remains appropriate.

Ownership arrangements should be reviewed periodically alongside your will and other estate planning documents.

Believing Joint Tenancy Eliminates All Estate Planning

Joint tenancy addresses only one aspect of estate planning.

You may still need:

• a comprehensive will;

• an Enduring Power of Attorney;

• a Personal Directive;

• tax planning;

• business succession planning;

• trusts, where appropriate; and

• planning for other assets that do not pass by survivorship.

A complete estate plan considers all of your assets—not just your home.

Costs and Considerations

Changing the ownership of real estate may involve a number of costs depending on your circumstances.

These may include:

• legal fees;

• Land Titles registration fees;

• real estate transfer costs;

• tax advice;

• accounting advice;

• property valuations where appropriate; and

• future costs associated with administering the estate.

While joint tenancy may simplify the transfer of certain property after death, it should not be viewed solely as a way to reduce probate-related expenses. The broader legal, financial, and family implications should always be considered before making changes to property ownership.

When Should You Speak With an Estate Planning Lawyer?

You should consider obtaining legal advice if:

• you are purchasing real estate with another person;

• you are deciding between joint tenancy and tenants in common;

• you are considering adding a child or another family member to title;

• you have a blended family;

• you own multiple properties;

• you own rental or commercial real estate;

• you wish to ensure your will and property ownership work together;

• you have concerns about tax consequences;

• you anticipate disagreements among beneficiaries; or

• you are reviewing your estate plan after a significant life event.

Obtaining advice before changing ownership is often far simpler than attempting to resolve unintended consequences later.

How Bridgestone Law Can Help

The way your property is owned can have a significant impact on your estate plan, your beneficiaries, and the administration of your estate.

Bridgestone Law assists individuals and families throughout Calgary and Alberta with wills, estate planning, probate, estate administration, and real estate succession planning. We help clients understand the legal consequences of joint tenancy, review existing ownership arrangements, and develop estate plans that reflect their personal and financial goals.

Whether you are purchasing your first home, reviewing your existing estate plan, or considering changes to property ownership, we can help you make informed decisions that are appropriate for your circumstances.