Many people use joint ownership as a simple method of estate planning. While joint ownership is appropriate in some circumstances, it is a blunt tool that can cause greater problems than it is intended to solve, where used incorrectly or in circumstances where the intention underlying the transfer is not clear.

In our estate practice, we regularly come across joint tenancies that have had serious and unintended negative consequences – these are the “pitfalls of joint tenancy”.

One of the pitfalls is that the owner of the asset gives up the sole right to control it. Let’s say a mother places her adult child on title to her home to avoid probate fees. Some years later, there is a falling out between the mother and the child.

If the mother later wishes to sell her home, she requires the child to sign off on the sale, since they are both on title. It is a simple matter for the estranged child to refuse to sign the sale document, or more likely, to demand payment for his or her “share” of the sale proceeds as a condition of signing. The result is that the mother either has to give in to the demand, or end up in potentially long and costly litigation against her child.

There are ways to avoid, or at least mitigate, the risk of loss of control inherent in joint ownership arrangements. For instance, the mother and children could sign a document clarifying the nature of their shared ownership.

It is the rare circumstance where a property owner is well-advised to proceed with a transfer into joint names, with anyone other than a spouse, without first obtaining legal and financial advice from a professional.