B.C. Homes, Joint Tenancy, & Deeds of Gift in Wills & Estates Litigation.
In BC today, the estates of the “baby boomers generation”, are worth in the millions of dollars. Much their estate consists of the family home- homes a generation of BC residents purchased for $100,000 to $200,000 dollars!
In BC today, the estates of the “baby boomers generation”, are worth in the millions of dollars. Much of their estate consists of the family home- homes a generation of BC residents purchased for $100,000 to $200,000 dollars, that are presently valued anywhere from $1 Million to $2 Million dollars, or often, more.
As the baby boomer generation slowly and sadly passes, unfortunately, they are uncertain about what to do with their family home; particular issues arise when they want to leave (or more appropriately, “bequeath”), the family home to some, but not all, of their children.
In this instance, the home owner has a number of options. This article focuses on the two most frequent options utilized: joint tenancy and deed of gift.
(1) JOINT TENANCY & the RIGHT OF SURVIVORSHIP
Placing the family home in joint tenancy invokes the right of survivorship. As we have previously noted, joint tenancy and the right of survivorship may be overruled by the Courts if their is a legal finding of “undue influence”. However, if completed pursuant to the laws of BC, it is likely that the joint tenancy will survive any potential wills variation claim. As such, should home owners’ desire that certain children are entitled to the family home, they may name said children as joint tenants ensuring that the right of survivorship will transfer the deceased’s interest in the family property to the children. The law governing joint tenancy and the right of survivorship was aptly summarized in the recent BC Court of Appeal (this Province’s highest court) case of, McKendry v. McKendry, 2017 BCCA 48, as follows:
Joint Tenancy and the Right of Survivorship
[27] Joint tenancy is a form of concurrent property ownership. When the “four unities” of title, interest, time and possession are present, co-owners hold an equal interest in property as a unified whole: Zeligs v. Janes, 2016 BCCA 280 at para. 38. However, parties may hold legal title to property as joint tenants while beneficial ownership is held differently. For example, a mother and son may own real property as joint tenants in law while the mother alone owns the beneficial interest. In such circumstances, as Rothstein J. noted in Pecore v. Pecore, 2007 SCC 17 at para. 4:
… The beneficial owner of property has been described as “the real owner of property even though it is in someone else’s name”: [citation omitted] …
[28] The principal characteristic of joint tenancy is the right of survivorship. When a joint tenant dies, his or her interest in property is extinguished. If there is more than one surviving joint tenant, they continue to hold the property as joint tenants. The last surviving joint tenant takes full ownership of the property.
[29] So long as the requirements of a binding gift are met, the owner of property may, during his or her lifetime, make an immediate gift of a joint tenancy, including the right of survivorship. This is so regardless of whether the donee of the gift is to hold it for the benefit of the donor while he or she is alive. When gifted inter vivos, the right of survivorship is a form of expectancy regarding the future. It is a right to what is left of the jointly-held interest, if anything, when the donor dies: Simcoff v. Simcoff, 2009 MBCA 80 at para. 64; Bergen v. Bergen, 2013 BCCA 492 at para. 37; Pecore at paras. 45-53.
[30] A donor may gift the right of survivorship, but continue to deal freely with property throughout his or her lifetime. In Simcoff, Steel J.A. explained why:
64 Simply, and conceptually, the fact that a “complete gift” may have been given and that this gift included a right of survivorship does not, prima facie, prevent a donor from dealing with the retained joint interest while alive. The right of survivorship is only to what is left. Accordingly, if one joint owner drains a bank account (in the case of personal property) or severs a joint tenancy (in the case of real property), there is nothing in the right of survivorship itself that somehow prevents this. In commenting on the issue of survivorship in Pecore, Rothstein J. wrote (at para. 50):
Some judges have found that a gift of survivorship cannot be a complete and perfect inter vivos gift because of the ability of the transferor to drain a joint account prior to his or her death: see e.g. Hodgins J.A.’s dissent in Re Reid [(1921), 1921 CanLII 534 (ON CA), 64 D.L.R. 598 (Ont. C.A.)]. Like the Ontario Court of Appeal in Re Reid, at p. 608, and Edwards v. Bradley, [1956 CanLII 32 (ON CA), [1956] O.R. 225] at p. 234, I would reject this view. The nature of a joint account is that the balance will fluctuate over time. The gift in these circumstances is the transferee’s survivorship interest in the account balance - whatever it may be - at the time of the transferor’s death, not to any particular amount.
(2) DEED OF GIFT & INTENTION
Alternatively, home owners’ may complete a deed of gift in conjunction with a will. A deed of gift is a legal document, akin to a contract, that outlines what one party is “gifting” to another; it is then signed by the parties and their lawyers, ensuring all parties have received independent legal advice.
A lawyer is necessary for your deed of gift, will, and your statutory declaration of intention - TRI-CITY LEGAL are experts in this regard.
There is no consideration provided by the donee (often, the children) to the donor (often, the home owners).
Along with the deed of gift and will, it is wise to include a “notice of intention” or a “statutory declaration of intention”, though not always completed. As noted in the law below, intention of a gift is imperative for the deed of gift to stand up to any potential wills’ variation claim. An example of this is the case of Weaver v Weaver Estate, 2019 BCSC 132; in this case, the deceased had transferred the bulk of his estate (worth nearly $600,000) to his cousin thereby disinheriting his children. The transfer included interest in a property on Hornby Island (the “Hornby Property”). The deed of gift and corresponding statutory declaration was summarized in the judgement as follows:
The recitals in the Deed of Gift that Carvel executed on November 15, 2012 reflect Carvel’s wish to “make an immediate transfer of the right of survivorship” to Vivian in relation to the Hornby Property but not to transfer beneficial ownership. The Deed of Gift includes the following provisions:
(1) Carvel hereby transfers the Land to himself and Vivian as joint tenants and in so doing makes a gift of the right of survivorship but no transfer of the beneficial ownership; (2) Carvel will sign all further documents and instruments as may be required to effect this transfer (including a Form A Transfer and Property Transfer Tax Form); (3) Carvel and Vivian will sign a Power of Attorney by Vivian in favour of Carvel so that Carvel may deal with the Land, unilaterally; (4) Vivian will sign a Form A Transfer transferring the Land to Carvel to be held by Carvel; and (5) This Deed of Gift constitutes the legal transfer of the Land by Carvel to Carvel and Vivian as joint tenants. By signing this Deed of Gift, Vivian acknowledges the limited interest being transferred to her.
Ms. Rowe deposes that it is her practice to prepare the form of Statutory Declaration that Carvel signed on November 15, 2012 in order to make the intentions of the donor clear and specific. In his November 15, 2012 Statutory Declaration, Carvel states as follows in relation to the transfer of the Hornby Property:
…(3) Prior to making this decision, I was advised about the difference between an outright gift, creating a tenancy in common, creating a joint tenancy to transfer the right of survivorship (only) and making a gift under my Will; (4) I chose joint tenancy to grant the right of survivorship because I want Vivian to be able to deal with my Home immediately after my death and I do not want my Home to form part of my estate. Still, I do not intend to grant any present beneficial interest in my Home to Vivian (other than the right of survivorship); …(6) I have required, as a condition of the transfers described above, that Vivian: (a) grant me a limited enduring Power of Attorney so that I may deal with my Home as I decide in my absolute discretion and without interference from Vivian; and (b) enter into a Bare Trust Agreement setting out that any interest Vivian may have in the home during my lifetime, other than the right of survivorship, is held by Vivian for my benefit.
Ultimately, the Court upheld the deed of gift stating, “Carvel intended to gift to Vivian the right of survivorship in the Hornby Property, and Vivian does not hold the Hornby Property on a resulting trust for the benefit of Carvel’s estate”.
If you or your family require assistance, please contact TRI-CITY LEGAL asap to protect your and your children’s interest. TRI-CITY LEGAL is up-to-date on the ever-changing legal landscape of wills and wills’ variation claim, and are experts in this regard. We may be reached by filling out the form below, calling (604) 628 8952, or by emailing us at: vsm@tricitylegal.ca!