The Problems of Joint Tenancies

Stan Rule of Kelowna, British Columbia, CA writes, in his Rule of Law Blog about “Another Joint Tenancy Gone Bad.”

It is amazing how many elderly people who, out of genuine concern for their children, transfer the title of their home to a joint-tenancy with their kids. The ostensible logic underlying the transaction is that, if they have to go into a nursing home, or if something else happens to them, they don’t want to lose their home – they want their kids to have it. Sometimes they just want it to pass to their children outside of probate… I wish it were so simple. The first concern, that of losing the home to either the government or a debt collector trying to recover the cost of unpaid medical care, requires a much broader analysis and the solution is almost always more complicated. The second concern is best accomplished with the use of a Transfer-on-Death Deed (something that is not available in all jurisdictions but is in Ohio — and apparently Nevada also).

Mr. Rule has already written a well-considered article on the same subject (applying Canadian law). His most recent post on the subject is about the recent case of Schoennagel v. Schoennagel and Gateway Automotive, 2006 BCSC 1830 which should serve as a useful scare tactic when all other reason and logic has failed to explain why this planning tool is a bad idea most of the time.

Thanks Stan.

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