Many people do this to avoid probate taxes. Is there any procedure required to ensure the Adult Child doesn’t have a Capital Gain when the parents die? Similar issues would arise when a parent goes on title to assist with financing an adult child’s home. Would beneficial ownership override the joint title? In both cases I’m assuming there is no financial contribution by the person added to title.
Would it make a difference if a low percentage of ownership were specified on the title in either of these situations?
Follow the money: If everyone will share the money when the property is sold, it joint ownership. If one or more get nothing when the property sells, you are likely looking at a bare trust.
Yes! It’s the new T3 reporting requirements for Bare Trusts. Keep up with the T3 s15 filings annually. Just to note that probate in Ontario is based on beneficial ownership so IF a probate application otherwise needs to be filed for the testor, this property would STILL have to be included and would not avoid probate.
If legal and beneficial ownership don’t match, then the percentage of legal ownership doesn’t really matter. It would be considered a Bare Trust. That said, I recently had a client who owns 0.01% of her daughter’s home for mortgage purposes. Technically if she wants to say that legal and beneficial ownership match and she is entitled to $100 when the house is sold for $1,000,000, well then no trust exists. To @helga_spence 's point of following the money.