Joint Ownership – Understand the Risks and Benefits

September 2026

As we age, we try to make life easier for both our families and ourselves. Many seniors transfer assets to joint ownership in order to avoid income taxes, but this is unlikely to succeed. You should think carefully before transferring assets to joint name, particularly if it is someone other than your spouse. Things that seem simple can sometimes create complications. You may be triggering tax costs, exposing your property to financial and legal risks, and creating family disputes after your death.

This article is about “joint ownership with right of survivorship,” where your assets will normally go to the other owner(s) upon your death. Sometimes, assets, such as your home and other real estate, are held in both names as “tenants in common,” and while the name on the title may be similar, the rules are completely different. If you own 50% of a property as tenants in common, your ownership is transferred to your beneficiaries according to your Will, not to the other owner. There is also a new legal concept of a “Gift of the Right of Survivorship”, for which you may wish to speak to your lawyer. With the “normal” joint ownership with right of survivorship, all parties on title immediately have an ownership right of the property, and when someone dies, the remaining owners receive his or her share of the property under the right of survivorship. That right of survivorship exists immediately upon assigning the joint name to the property. With the “gift of the right of survivorship”, the original property owner is not giving up any ownership immediately. Instead, they are attaching a condition to the property whereby on their death, and not before, the right of survivorship is created and the appointed beneficiary will immediately inherit the property. That is my “accountant” explanation and you should seek legal counsel for an official version. This gifting method presumably protects the property from any risks or liabilities, including taxes, that are created by transfer to normal joint ownership because there has been no beneficial change in ownership. I emphasize the word “presumably.” This is a newer concept, it is not used in every province, and I am not aware of settled Canada Revenue Agency guidance on how it is treated for tax and trust reporting purposes. Do not rely on it without legal advice.

This article is discussing a change to joint legal ownership with the right of survivorship attaching immediately.

If a property is subject to income taxes when you sell it, then a change to joint ownership with anyone other than your spouse may trigger immediate taxes. For example, assume you own your cottage in your name only and you do not want to claim it as your principal residence. If you transfer one-half of the beneficial ownership of the cottage to placing it in joint name with one child, it will be treated by the Canada Revenue Agency as if you sold one-half of the property. If the property increased in value above its original cost plus later renovations after you built or bought it, then you will have taxes to pay on the gain. The other half of the property is still considered as owned by you and the gain will be taxed in the future when the cottage is sold or is given to your child, or upon your death.

Putting a bank account in a joint name will not trigger any taxes because there would have been no gain in value over the original deposit. Be careful, though, if the account holds investments rather than cash. Stocks, mutual funds and similar holdings can have gains built up in them, and transferring beneficial ownership of those can trigger tax in the same way as the cottage above. Note also that putting an account in joint name does not, by itself, change who reports the interest or other income. If the money is still yours, the income is still yours to report.

Remember how I said that transferring an asset to joint name could lead to more complicated issues? Let us use the bank account as an example. Assume you have several children, and you put your adult daughter on your bank account as joint holder. Why did you do this?

• Did you intend to transfer one-half of the bank account balance to that child now instead of later? If so, is it an early inheritance and does it reduce the amount she is entitled to through your Will?
• Were you only doing this for convenience so that she could help you with your banking? If so, do you have several children? Do you plan to give each of them an equal share of your assets when you die? How do you wish this bank account handled at that time?
• After your death, a joint owner with right of survivorship will normally get ownership of that bank account. If you have $100,000 in the bank account, and have only one child, he or she will likely inherit it immediately, especially if that is he or she are the only beneficiary in your Will. However, what if you have more than one child? Do you think your other children would question whether that daughter should be entitled to all of the money? Was it an additional gift to her, or should her share from your Will be reduced to treat all children equally?

Be clear, in writing, when you transfer accounts (or any property) to joint name to avoid such problems. Assume you have two children, and you transfer an asset to joint name with one child. What may happen when you die? If it is clear that you intended for that child to receive full ownership of the property at your death, it will pass to them clear of probate. If there is any doubt, and the other child claims half, then the first child will need to prove your intention was to give it to them, or the court will divide it equally (after many legal fees and much loss of sibling love).

These rules are based on a decision by the Supreme Court of Canada (Pecore v. Pecore, 2007 SCC 17). You should review all of this discussion with your lawyer for clarification and certainty, but essentially the Court decision states that:

1. Joint accounts held with a minor child will be deemed to belong to that child after your death. This is legally called the presumption of advancement. Accounts held jointly with a spouse are a separate question. Pecore itself concerned a parent and an adult child, and presumptions between spouses are largely governed by provincial family property legislation, which varies from province to province. Ask your lawyer about the rule where you live.
2. Joint accounts held with adult children (whether still dependent or not) will be deemed to be held in trust by those children on behalf of the parent(s), and will form part of the parent’s estate to be divided in accordance with the Will. This is legally called the presumption of a resulting trust.
3. These presumptions can be challenged (rebutted) by others where they have evidence to do so. For example, if one child has a document proving that the parent was gifting them that asset by putting it in joint name, then they have rebutted the trust presumption and may be able to keep the property to themselves.

You do not want your family and your executor to face dealing with such challenges, so be clear in your intentions, and, personally, I suggest avoiding use of joint ownership unless essential. (See my comments on use of a Power of Attorney below.) I was executor of an estate where the bank account was in joint name with a child. The family all agreed, including that child and all of their siblings, that the account was to be divided with everyone based on the Will. Before the money could be transferred to an estate bank account to pay the funeral, legal and other estate bills, the bank required written permission from the joint owner to move the money. From their perspective, the account now belonged to the joint holder. It took many weeks for the bank to satisfy themselves that this could be done, even after the joint owner gave them written permission – a long, unnecessary delay in settling the estate.

There is another complexity to consider along the line of “Who really owns that money (or property)?. There is a difference between transferring the “beneficial ownership” of a property to someone, and simply putting a property in joint name for “convenience” with no real change in ownership intended. If you transferred the property for convenience only, i.e., you still beneficially own the property, you did not have a change in ownership for income tax purposes, and you will likely pay probate costs at death because the property will still form part of your estate to be governed by your Will. Alternatively, if you have transferred beneficial ownership as well as legal title, then you will avoid probate, but the property will be subject to any immediate income tax consequences in the year you transferred it to joint ownership. The Canada Revenue Agency will determine whether you transferred 50% of the ownership to that person based on the individual facts available. (Prior to the Pecore decision, they assumed an immediate change in ownership when transfers were made to an adult child; they have advised me they now look at each situation and the surrounding facts and intentions based on evidence.) If actual beneficial ownership was transferred, you need to report a sale at fair market value on that year’s tax return, and pay the related capital gains taxes. Even if the property is your principal residence, it still needs to be reported, although it may be exempt from taxes (but only if you file the proper forms). As jointly owned, the property will eventually be transferred to the joint owner on your death without probate fees. At that time, you will still own part of the original property, and need to pay taxes on any capital gains on your portion of ownership (e.g., 50% in my example above).

Speak to your lawyer about this. If you do not have a lawyer (and if you have no Will and Power of Attorney), in PEI, you can call the Community Legal Information Association of PEI www.legalinfopei.ca to obtain a lawyer referral. Other provinces also have public legal information associations that may offer this service.

If you have this “beneficial ownership” arrangement for your home, the non-beneficial owner is probably holding a share of your home “in trust” for you. This is usually what is called a “bare trust” — the person on title holds nothing more than the paper title and must do as the real owner directs. Nobody signs anything, and nobody thinks of it as a trust, but a trust is what it is. New trust reporting rules now apply for 2026 and later years. Many trusts, including informal ones that nobody ever intended to create, must now file an annual T3 Trust Income Tax and Information Return, although a number of exceptions apply. If you transferred a property to joint name of a child, you need to determine:

1. Did you transfer beneficial ownership? If so, you need to report the transfer on your tax return, whether or not it is a principal residence.
2. Did you keep 100% of the beneficial ownership, but transfer legal title to joint name? If so, you need not report the disposition on your tax return. However, the joint owner is now holding part of the legal title in trust for you. For these rules, every person on joint title is treated as a trustee, and you, as the real owner, are the beneficiary. That means you can end up being both a trustee and the beneficiary of your own home. A T3 Trust Income Tax and Information Return may be required each year, starting with 2026, and it is due 90 days after the end of the year — a month earlier than your personal tax return. There are exceptions. The one most useful to families is where everyone on title is related to each other and the property is the principal residence of one or more of the people on title. The test looks at the people on title, but that is less restrictive than it sounds. A home ordinarily lived in by your child can count as your own principal residence, so the exception can apply even where the child is not on title. It does not work the other way round, though: a home lived in only by your parent cannot be designated by you, because a parent is not among the people whose occupancy counts.

The same question arises with the joint bank account discussed earlier. If your daughter is on the account only to help with your banking, she is on title without owning any of the money, so the arrangement may well be a bare trust. Two of the exceptions may help. The first applies where the trust holds assets of any kind worth no more than $50,000 throughout the year. The second is more useful here: where every trustee is an individual, and every beneficiary is an individual related to each trustee, the limit rises to $250,000, but only for “money-like” assets such as cash, guaranteed investment certificates, listed shares and mutual funds. A parent and an adult child are related, so the $100,000 account in my example above would normally be covered. A larger account, or one holding other kinds of property, may not be. Where one of these exceptions applies to a “bare trust”, the Canada Revenue Agency has stated that no T3 is required, no matter how much interest the account earns, and that the only way a return can become due is if the Agency demands one (Technical Interpretation 2026-1099261E5). That is helpful, but it settles only the filing question. It assumes there really is a bare trust, which depends on what everyone intended at the time. Where nothing was written down, the Agency may take the view that the money was simply given to your daughter, in which case tax may apply and the money is no longer yours. Do not assume that an account is too small or too everyday to matter — write down what you intended, and ask your tax advisor.

The single most useful thing you can do is write down, at the time, what you actually intended, and have everyone involved sign and date it. Whether a trust exists, and who really owns what, turns on intention. Where nothing was written down, families end up trying to reconstruct that intention years later, usually after a death and often with siblings who remember things differently. I have prepared a worksheet, the Real Estate Ownership Worksheet, to help you gather the relevant facts before meeting your lawyer. For a fuller discussion of these trust rules, see my article, “Whose Property Is It, Really? Trusts, Joint Title, and the Family Home.”

The positive side of joint ownership with transfer of beneficial ownership is the ease of transfer upon death. Probate fees are avoided because your Will is not involved. Probate fees in Prince Edward Island are about $400 for each $100,000 of assets (as of the time of writing), but much higher in most provinces (e.g. 1.5% in some provinces). Executor fees may also be avoided. Executor fees often apply to the assets flowing through your Will and can typically be 3% to 5% of your assets. Certain lawyer’s fees are also based on the value of your assets. When a Will is probated it becomes a public document – anyone can read it. This is why the use of joint ownership also keeps things private.

There are some other serious downsides to think about when transferring something to joint ownership. For example, you could suffer serious financial losses if the other person has personal or business problems, gambling or addiction issues, is sued, or goes through a divorce. For example, if you own your home jointly with someone who declares bankruptcy, you could lose that person’s share of your home to the creditors. If your bank account is in joint name, the other person could spend all of the money without you being made aware.

If you need help with day to day banking and payment of bills, instead of using a joint bank account (or giving someone your credit card and personal identification number, which would make you personally liable for any fraudulent use), make a Power of Attorney. Giving someone a Power of Attorney to act on your behalf can be done for specific purposes, such as paying your bills and using your bank account for your purposes. That person can be held legally responsible if they do not act in your best interests, which is next to impossible to do with respect to joint accounts. A Power of Attorney is not difficult, and will be much safer than giving someone joint ownership. A Power of Attorney also avoids the trust reporting question entirely, because nobody else goes on your title or your account.

You should also see my article on transferring your home to your children and keeping a “life interest,” if this is something you are considering. This procedure can lead to unexpected tax costs. Click here for that article.

It is important to understand all the possible consequences and get advice based on your situation.

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Blair Corkum, CPA, CA, R.F.P., CFP, CFDS, CLU, CHS holds his Chartered Professional Accountant, Chartered Accountant, Registered Financial Planner, Chartered Financial Divorce Specialist as well as several other financial planning related designations. Blair offers hourly based fee-only personal financial planning, holds no investment or insurance licenses, and receives no commissions or referral fees. This publication should not be construed as legal or investment advice. It is neither a definitive analysis of the law nor a substitute for professional advice which you should obtain before acting on information in this article. Information may change as a result of legislation or regulations issued after this article was written.©Blair Corkum