Joint Tenants with Right of Survivorship in Canada: Key Facts

When one seeks to own real estate in Canada, it becomes important for the person to understand the different ways in which property can be held or owned here. One of the popular options, and also a suitable option for many, is joint tenancy with right of survivorship. This is one of the forms of ownership which can be suitable for those looking for an appropriate option to plan an estate and for managing property. Whether you are a homeowner, investor, or involved in estate planning, understanding how different types of ownership work is really important to safeguard your interests and to choose what is feasible. Understanding joint tenants with the right of survivorship becomes important if you are considering future transfer of property especially after death.

This blog will guide you in understanding what joint tenants with right of survivorship mean, its advantages, how it is different from other forms of ownership, and if you can avoid probate. You will have a better understanding of different forms of ownership and this can be crucial in deciding what you want.

What is Joint Tenancy with Right of Survivorship?

There are different types of co-ownerships where two or more individuals have shares in the property. Joint tenancy is one form of co-ownership where two or more people can hold equal shares in a property. While holding equal shares is one of the features of joint tenancy, the key or the defining feature is the ‘right of survivorship’. Because of this key attribute, when one of the joint tenants passes away, their share of the property gets automatically transferred to the surviving tenant or tenants. There is no need for a probate or a will in this case.

Simply put, if one of the partner dies, the surviving partner will automatically become the sole owner of the home bypassing the legal process of distributing the estate. Many people, especially spouses and family members, prefer joint tenancy with the right of survivorship because it simplifies the transfer of property after death.

Key Features of Joint Tenancy

• Equal Ownership:as we mentioned before, this is an important aspect of joint tenancy where all the co-owners hold equal shares in the property. The share will depend upon the number of co-owners. With two owners, each will own 50%. If there are four owners, each will hold 25% share.
• Unity of Time and Title:this is another important aspect which means that joint tenants must acquire their ownership interests at the same time and through the same deed or document.
• Right of Survivorship:the property transfers to the surviving joint tenant or tenants when one of the tenants dies without the need for probate.
• Indivisibility:it is not possible to divide the property amongst the joint tenants. The property is considered a single, indivisible asset until it is either sold or until all but one joint tenant has passed away.

Joint Tenancy with Right of Survivorship: Main Advantages

Joint tenancy can be beneficial in many ways and mainly for those who want to simplify the transfer of property after death:

• Avoiding Probate:perhaps the biggest advantage, the process of probate can be bypassed. People save time, money, and the process of transfer tends to be a smooth one.
• Simplicity: the right of survivorship in joint tenancy helps in avoiding complicated legal procedures.
• Cost Savings:as the probate can be avoided here, the surviving owners can avoid legal fees and court costs.
• Equal Control:due to equal share in the property, couples or families can have equal say in major property decisions, such as selling or mortgaging the property.
• Beneficial for Spouses:joint tenancy can ensure that the property stays with the surviving spouse without any need for legal intervention.

Does Joint Tenancy with Right of Survivorship Avoid Probate?

In Canada, joint tenancy with right of survivorship can avoid probate. As the right of survivorship ensures that the property automatically transfers to the surviving tenants, there is no need for the probate process. It simplifies transfer of property after death which is why families and couples find this an attractive choice.

Probate is a legal process which can be time consuming and costly especially for large estates. This process validates a deceased person’s will and it is also used for distributing their estate.

It is important to note that the right of survivorship applies only to the jointly owned property. Other assets not held in joint tenancy may still be subject to probate.

Potential Drawbacks of Joint Tenancy

Despite its many benefits, joint tenancy also has certain drawbacks:

• Loss of Control Over Distribution:in joint tenancy, the right of survivorship takes precedence over any instructions in a will. In case, a parent wants their children to get their share in the property after their death, this won't be possible if the property is held in joint tenancy with a surviving spouse.
• Tax Implications:if there is a disagreement between joint tenants regarding sale or management of the property, there can be a conflict which may even involve the court.
• Disagreements Among Owners:if there is a disagreement between joint tenants regarding sale or management of the property, there can be a conflict which may even involve the court.
• Creditors and Liabilities:if one joint tenant faces any financial trouble, their creditors may be able to make claims against the property which can affect the other joint tenants.

Joint Tenancy vs. Tenants in Common

Understanding joint tenancy in context of other forms of ownership like tenants in common can further make the concept and different aspects clear for you.

These are the main differences between common tenancy and joint tenancy:

• Ownership Shares:In tenancy in common, co-owners can hold unequal shares in the property. In joint tenancy, ownership is always equal.
• Right of Survivorship:There is no right of survivorship in tenancy in common. When a tenant in common passes away, their share of the property passes to their heirs, according to their will or intestacy laws. In joint tenancy , it passes automatically to the other co-owners.
• Flexibility:Tenancy in common provides more flexibility. There is a certain freedom to leave their share to their heirs, sell their share independently, or hold unequal interests.

Conclusion

Joint tenancy with the right of survivorship is a great option for property ownership in Canada. Joint tenants can avoid probate and this leads to smooth transfer of property after death. The process is simple, saves cost, and renders equal control.

By now, you have some idea about the benefits and drawbacks of joint tenancy. To understand if it is the right option for you and if it aligns with your vision, it’s wise to consult a real estate lawyer or a trustworthy firm like Houseclosing. This can help you make the right decisions about how your property will be managed, both during your lifetime and after your death.