Should I add my name to the title of my elderly parent’s house? Are there risks when you add or remove names to the property title?
Disclaimer: This article discusses estate planning. It is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
We have spoken before to elderly parents about adding their adult children to their joint accounts and their investments. We know you want to avoid paying estate tax, avoid probate, or want to simplify the process for your loved ones.
However, should you put your adult child’s name on the title of your home? If you are the adult child, should you agree to be added to your parent’s property? On the surface, this seems like a straightforward solution, but the reality is far more complex. Significant legal and financial risks could turn this seemingly simple step into a costly mistake.
This article will talk about the risks involved. However, we encourage you to speak to our team of estate law lawyers to create an estate plan that works for you and your family.
Should I add my child’s name on title to my house?
In Ontario, transferring or adding someone to a land title is not as simple as it may seem. Below, we explore some of the key risks involved.
Changing a house title in Ontario – knowing the risks
In Ontario, a title change is not as simple as it may seem. Below, we explore some of the key risks involved in adding your child’s name to title.
How Your Child’s Life Changes Impact Title
One of the most significant risks arises from the fact that your child’s circumstances can change unexpectedly, and these changes can directly impact your home. Once your child’s name is on the title, they are legally recognized as a co-owner of the property. This means that their personal and financial situations—such as marital issues, debts, or legal troubles—can have serious implications for your home.
Imagine that you add your son to the title. A few years later, he faces a divorce, and his spouse claims that the home should be considered a matrimonial asset. Under Ontario’s Family Law Act, the property could be subject to division, meaning that your son’s ex-spouse could have a claim to a portion of your home.
Similarly, if your child incurs significant debt, their creditors may turn their attention to the property. Creditors could take action to recover what is owed.
Removing their name could be costly
What if your circumstances change, and you decide to remove your child’s name from the title? Unfortunately, removing a name from the title is not straightforward, and it can involve more than just a simple paperwork adjustment.
When a name is added to a title, the law recognizes the new owner’s legal rights to the property. This means that, once added, the co-owner typically must sign off and agree to these sorts of changes. If they refuse, you could find yourself in a difficult legal position.
Family disputes and broken promises
Adding one child to the your home’s title can create expectations and promises that may not be honored after your death. Even if your child agrees to divide the property fairly with their siblings, there is no legal obligation for them to do so once they become the sole owner through the right of survivorship.
A mother adds her eldest daughter to the title of her home, with the understanding that the daughter will sell the property after her death and divide the proceeds among her siblings. However, after the mother’s passing, the daughter decides to keep the property for herself, arguing that she is the rightful owner by law. The other siblings are left with no choice but to take legal action against their sister, resulting in a costly and emotionally draining legal battle that could have been avoided with clearer estate planning.
Before you add a name or do a title transfer, contact Beeksma Law!
The decision to add a child’s name to your house title should not be made lightly. While the goal is often to simplify estate processes and save on taxes, the potential risks are significant and can lead to far more complicated and costly situations than you might expect.
At Beeksma Law, we focus on estate law and can guide you through planning for your future. Before making any decisions, contact us for a consultation. Together, we can create a plan that avoids these pitfalls and secures your legacy for the next generation.
We also encourage you to consider our other blog articles. We care about the legacy you leave behind for your family, which is why we have covered many estate topics in our blog, such as choosing an executor or understanding what happens to your mortgage when you pass away.