Be careful before you start putting your children on title to your assets, especially if they are going through bankruptcy or divorce. In other words, if someone takes legal action against our child and your child is on title to your assets… you may be at risk. Take the recent case of Eng Re (217 A.C.W.S. (3d) 273), where a mother put one of her four children on title to her bank account and her home when that child was 21. Years later, that child filed for bankruptcy and did not disclose any interest in the bank account or the property. The bankruptcy Trustee took steps to realize on the joint assets.
The mother filed a proof of claim and submitted to the court that the bankrupt son was holding those joint assets in trust for her – that she did not intend to gift them to her son. The court reviewed the evidence of how the assets were managed; who contributed money to the property and the bank account, who paid the expenses for the property, and who made the deposits and withdrawals from the bank account.
Fortunately for this family, the bankruptcy Trustee was not able to rebut the presumption of resulting trust in favour of the mother. That is, the court held that mom’s assets were her assets alone and the Bankruptcy Trustee could not take them to pay the son’s debts. This family did, however, have to pay lawyer fees and court fees to determine who owned what assets. More importantly, being served an attachment order by a bankruptcy Trustee as well as going to court is stressful!
Instead of putting your children on title to your assets, you can ensure that your children can manage your property on your behalf through your Enduring Power of Attorney. You can also ensure that your intent to gift to your children is done securely through your Will. Having these documents in place lets you enforce your intent and keep your family safe.
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ESTATE OPTIONS Geraldine Hampton l Estate Lawyer l 403-483-2020 l estateoptions.ca