Hardly a week goes by when I am not asked by a client with grown children whether they can save Ontario’s 1.5 per cent probate tax by registering their home in joint names with one or more of their children.
The intent is that on the death of the parent, the children would automatically become the surviving owners without the need to obtain a court certificate of probate and pay the Ontario tax.
While there may be many good reasons for seniors to register a home jointly with their children, this procedure is not always foolproof, and in some cases can backfire badly.
That is what happened to Veronica Balkisson. In text messages to her children and in a handwritten will she prepared and signed, she stated that she wanted to give each of her children a “gift inheritance†of $420,000 during her lifetime.
In March of last year, Veronica bought a property on Lambeth St. in Brampton for $905,000. Her intention was that her children, Stefan and Heaven, would each receive a $420,000 interest in the house on her death, and they would eventually repay their mother during her lifetime the $65,000 difference between the total gifts of $840,000 and Veronica’s $905,000 purchase price.
Veronica paid cash for the property, and on closing it was registered solely in the name of Stefan since Heaven was not yet 18.
Case is a lesson for homeowners who did not buy title insurance when they bought their house,
In May 2024 Stefan, his wife Andrea, Heaven, and all their children moved into the Lambeth property.
Unfortunately, family relations deteriorated almost immediately, and Veronica was prohibited from visiting the property and seeing her grandchildren.
Later that month, Veronica met with her children and handed them a copy of a new will stating that she was giving her children equal shares in her estate. She asked Stefan to attend at their lawyer’s office to sign over the Lambeth property to her, as he was not complying with his obligations as trustee “mostly due to his wife.â€
Stefan later said that he was shocked when he saw that Veronica had listed the Lambeth property as one of her assets in the will.
Even though the property was registered in Stefan’s name, Veronica wrote to Stefan telling him that he had to move out of the house, and that he should be ashamed of himself for stealing her hard-earned money.
It wasn’t long before Veronica brought a court application for a declaration that Stefan was holding legal title to the Lambeth St. property in trust for her. She claimed that she was the true beneficial owner, having fully funded the purchase, and that her son held it as a bare trustee for her.
Stefan opposed the application, taking the position that the property was a valid gift from Veronica to Stefan and his younger sister Heaven.
The dispute turned on whether Veronica intended to gift the funds to her children or whether Stefan was holding the property in trust for her or for the benefit of her estate. Veronica argued she never intended an outright gift and had always planned for the property to be part of her estate.
Justice Lisa Brownstone dismissed Veronica’s application, finding that a valid gift had been made to her children and that Veronica could not revoke it.
No-one ever plans to have a family dispute, but registering real estate jointly in the names of children just to save probate fees, and without proper legal advice and documentation, can cause untold legal and personal misery.
To join the conversation set a first and last name in your user profile.
Sign in or register for free to join the Conversation