We are often asked by clients if they should put the title of their home into the joint names of themselves and one or more of their children. This is done to avoid probate problems so that you don’t have to wait for the court to issue a grant of probate before the beneficiaries/children can deal with/sell the home. No problem with that reasoning.
However recently the federal government has decided to create a situation where that example would be deemed to be a bare trust with the son or daughter possibly being required to pay taxes because they would be a “bare trustee ” regarding the property. They would not be living on the property as their principal residence whereas the parent is living there. So the portion of the gain held by the parent would not be taxable on the basis of the principal residence exemption but the gain in the value of the home held by the son or daughter could potentially become taxable.
The federal government has not yet laid out regulations regarding this but you can expect that in the near future
Also remember that when you transfer your title into the joint names of yourself and a child or children this is a one-way street. What happens if you change your mind and want to get the title back into your name without your children being on title question what happens if your child or children refuse to transfer the title back into your name as the sole owner? In this case we recommend 2 title transfers to be signed; 1. The first being from the parent to the parent and child and 2. From the parent and child back to the parent. Both title transfers are signed at the same time.
If the parent decides they want the title back into their name as the sole owner, they just call us and ask us to submit the 2nd transfer to the land titles office