Ask the Law Expert – Rocky Hornung
What does it mean when something is owned “jointly”?
When two people own something, (let’s say a house for example) as joint tenants, it means that all of them own 100 percent of the house. It does not mean that they each own fifty percent of the property. This is significant because upon death, the surviving joint tenant receives the deceased’s interest in the property by operation of law. Thus, if you die but all your property holdings were held jointly with other people, none of that property will form part of your estate; rather your interest in those properties will be absorbed by your fellow joint tenancy holders.
Joint Tenancy can be distinguished from property owned as tenants in common. In this scenario, both persons can own whatever percentage portion of the property that they designate and it is specifically stated on Land Title registration records. In this case, if one of the tenants in common dies (owning 40 percent for example) that forty percent will form part of the deceased’s estate. It will not flow to the surviving tenant in common because the property was not jointly held.
A common example of how failure to understand what “joint” means at law has hurt people is with seniors who choose to open a “joint bank account” with one of their children to have their child aid them in paying their bills. Quite often, Mom or Dad fail to realize that if they die, all of the money in the jointly held account will flow directly to that particular child (whose name is on the joint account) and will not form part of their estate, thereby depriving their other children from receiving any money from that account under their will. To avoid this, people are advised that if they require the help of their children for financial purposes, that they obtain an enduring power of attorney which will authorize the appointed child to do financial transactions on their behalf but avoid the shortfalls and potentially negative consequences of opening up a joint account.
For the amount of time and trouble it can save, one is advised to simply ask their lawyer for advice if you are contemplating opening a joint account with him/herself and a child for the purposes of having that child handle your finances.