The joint tenancy trap


ChainsIn my estates practice, I see a lot of people ask me about adding a child on title to their house in order to avoid probate. I usually talk them out of it.

There are a number of reasons this can be a very bad idea:

  1. You can’t change your mind later without the child’s consent. They now own your house with you – and yes, they can force a sale in order to get their share of the equity.
  2. You will not be able to get a mortgage or sell the house without your child’s consent.
  3. You may have to pay tax on the transfer, and at the very least, your child will likely have to pay tax when the house is sold.
  4. Your child may have to pay Land Transfer Tax on half the value of the house.
  5. If your child has creditors, or separates from a spouse, your house is now an asset that can be accessed. Because it is also your child’s house.

Before you act, be very, very sure that it is the right decision. In this case, it usually isn’t.