Be Wary of Joint Ownership

Joint ownership is a form of property ownership that involves owning property with another person. In Alberta, joint ownership is distinguished from another form of ownership known as tenancy in common. What distinguishes joint ownership from tenancy in common is that joint ownership has a special right attached to it – the right of survivorship. The right of survivorship means that the person who lives the longest eventually becomes the sole owner of the property in question. With tenancy in common on the other hand, when you die your estate still retains ownership of the share of the property that you owned while alive. 

Joint ownership can be a useful tool in estate planning, but it can also lead to problems in certain circumstances. It is often used as a means to allow property to “bypass probate”. Property that is owned jointly will – in most cases – not for part of the estate of the first person to die. The most common use of joint ownership is when purchasing property as a married couple. Typically spouses (at least in a first marriage) intend for property to pass to the surviving spouse on the death of the first spouse. That is not always the intention, but it is a very common intention. 

However, when other people, such as business partners or siblings, purchase property together, it is rarely the intention that the survivor should become the sole owner of the property. Also, when someone remarries who has children from a previous relationship, that person often wishes to have his or her children receive something substantial when he or she dies. By owning property jointly with someone other than a first spouse, you run the risk of effectively disinheriting your surviving children. 

This is not to say that you should never own property jointly with anyone other than your first spouse. However, if you are contemplating owning property jointly, you should fully consider the legal effects of such a choice.