None of us like to pay taxes. It's a good day when we come up with a plan to avoid the tax man. However, homemade decisions without the proper advice from a lawyer and an accountant can create a very expensive problem.
Over the years in my practice in estate administration, two examples of "homemade solutions -- homemade problems" have come across my desk numerous times.
Your principal residence is perhaps the last and only great tax advantage given by the Federal government. The Income Tax Act has a rather convoluted definition of principal residence, but basically it's your home that you ordinarily inhabit since the time of purchase.
The advantage of a principal residence is that on its sale (or disposition by your estate on your death) there is no income tax, including capital gains. Thus, a major increase in the value of your home is yours to do with as you see fit, without tax consequences.
However, a homemade solution/problem is the transfer of title to the children. The mistaken thought is that title will transfer to the children on death of the parents and the taxman will be avoided. Unfortunately, this scheme might do the exact opposite. By putting the title in the name of a child the taxman might "deem" that the property was sold thereby reducing the tax free status. An increase in value from the time of the title transfer to the death of the parent may incur capital gains tax.
Another common practice is for a parent to put bank accounts in joint names with one of their children. Usually the intent is that the child who lives closest to the parent will help the parent in managing their money and in the payment of various bills. The problem arises when the parent dies. With the death of the parent, the account is now in the sole name of that child. Numerous court cases have resulted as the child has claimed that the parent intended the funds in the account go to them upon their death. Obviously, regardless of the size of the account, the rest of the children may take issue with this assumption.
All of the acrimony and legal cost could be avoided if the parent includes specific wording in his or her Will as to the intention. Alternatively, a simple Agreement or Acknowledgement could be signed wherein the parent's intention is made clearly known.
To avoid the taxman seek proper legal and accounting advice.