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Should I add my adult child on title to my home?

A common motivation behind a parent adding an adult child on title to their property is eliminating probate tax through joint tenancy. In joint tenancy, upon the parent’s death, the property automatically transfers to the adult child, thereby avoiding probate tax. Although it might save “some” taxes adding your adult child to the title of your home comes with a lot of risk and uncertainty. One may think they are strategically planning, but through a critical eye and legal perspective, this can lead to more trouble than it might be worth.

Here are factors to consider in determining whether you should add your adult child to the title of your property.

1. Principal Residency Tax

Adding an adult child to the title of the home puts the principal residency tax exemption at risk. The primary residence is one of the few assets that attract preferential income tax treatment and can quickly vanish without careful planning.

If your goal is to avoid estate taxes, you may want to consider this example. In 2001, a mother decided to register her daughter on title to her property worth $450,000.00.

In 2021, the mother passed away, and the property was sold for $1,000,000.00. The sale will cause a tax problem for the daughter if she already owns a principal residence. On the mother’s death, half the appreciation since 2001, the daughter’s half, would be subject to capital gains tax, leading to a tax bill of approximately $68,750.00.
In an attempt to save approximately $14,000 worth of probate tax, the estate will now have to pay $68,750.00.

If title to the mother’s property was not mis-managed, the estate would have been better off by approximately $54,750.00.

2. Consent

Now that the daughter is on title, the mother must get her consent to sell or re-finance the property. If the daughter marries or has other motivations, this may prevent the mother from dealing with the property as she would like.

3. Financial Risks

Putting the daughter on title exposes the property to many financial risks. For example, half of the property is now exposed to the daughter’s creditors, a matrimonial home designation, and a potential ex-husband claim for half of the home. The daughter now has the ability to use the property as collateral for her own loans. 

4. Family Conflict

Further, putting one child on title to a parent’s home may lead to family conflict and tension when dealing with the rest of the estate. If the home comprises all or the majority of the estate, the other children may receive far less in comparison. The unequal distribution between siblings can potentially lead to litigation.

5. Resulting Trust 

The Supreme Court of Canada in Pecore v. Pecore 2007 SCC 17 upheld the general rule that transfers of property and/or gifts from parents to adult children are legally presumed to be held in trust for the transferor’s (i.e. the parent’s) estate unless the transferee (the child) can establish on a balance of probabilities that a gift was intended. If the presumption is not rebutted (i.e. the child cannot demonstrate that a transfer or gift of the property was intended) then the property will result back to the transferor (i.e. the parent) or his/her estate.

The lawyers at Willing Law can guide you through all of your real estate law needs. Contact us today at (519) 980-3476 or at to schedule your consultation!