A good example of creating complications within an estate is the body of law surrounding joint ownership. The common thought in the public eye is that joint ownership equals a right of survivorship. It is thought upon the death of one joint owner the asset automatically transfers to the other named joint owner with no resulting estate administration (probate) tax and no income tax. Oh how wrong you can be and what difficulties this may create for those administering your estate (not to mention how upset the beneficiaries will be at the resulting turmoil).
Firstly, lets get off the table what issues in joint ownership are clear and unambiguous. The ownership of land in the Province of Ontario is governed by statute that basically states that in the absence of any express intention to the contrary, real estate which is registered in the name of two or more persons "as joint tenants" creates a joint tenancy. The land will pass to the surviving joint tenant without going through the estate.
Transfers between spouses are also treated specially in view of the statutory provisions of the Ontario Family Law Act. If property, be it land or other personal property, is held in joint names of spouses it is presumed that there was an intention of joint ownership and it is deemed that there is a right of survivorship.
Aside from these exceptions which are created by statute, joint ownership cannot be presumed because an asset is listed as being jointly owned. Simply putting someone's name on an account as joint interest with right of survivorship is not enough.
It's not hard to see how the testators perfect plan to divide up an estate, and be fair to all, can be radically altered leaving much ill will among the beneficiaries.
A recent court case in Ontario illustrates the need for proper legal advice in estate planning to achieve the testator's intention.
In this case a mother's will is very straight forward in leaving her estate equally among her four children. However the mother's bank account and GIC's were registered in the name of the mother and her independent adult daughter. After the death of the mother, one of the sons challenged the sister's claim to the bank account and GIC and was successful in court.
The court held that no evidence of the circumstances in which the bank account and the GIC came to be transferred into the name of the mother and daughter. The daughter said that her mother intended that this be compensation for the care of her mother. However, there was no proof of the intention of making a gift, nor could the mother's intention be corroborated after her death, as she left no written document or other evidence which could prove her intention.
No doubt, the sister has not invited the brother over for Thanksgiving dinner. Had the mother sought competent legal advice in the preparation of her will, this issue could have been avoided, the family unity maintained and yes, much saved in legal fees.
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