In my previous blog post, Probate planning pitfalls: The risks that you need to consider before adding your child to the title of your home for estate planning purposes, I wrote about the risks and possible legal issues that can arise when using joint tenancy as an estate planning tool. As I outlined in that post, the use of joint tenancy as an estate planning tool—which entails adding a family member to the title of your home as a joint tenant with the intention of that person inheriting the property upon your death—has become increasingly common. However, this estate planning technique is fraught with risk.
A perfect example of how using joint tenancy as an estate planning tool can go horribly wrong is highlighted in the recent Court of Appeal decision of Jackson v. Rosenberg, 2024 ONCA 875 1 ("Jackson"). As noted by the Court in its decision, the circumstances giving rise to Jackson serves as a cautionary tale for anyone who is considering using joint tenancy as an estate planning tool.
In Jackson, a gentlemen named Nigel added his great niece, Lori, as a joint tenant to the title of his home in Port Hope, Ontario. Importantly, Nigel's act of adding Lori to the title of his home was entirely gratuitous. That is, Nigel did not require Lori to pay him any money in exchange for her being added to the title of his home.
Nigel added Lori's name to the title of his home for estate planning purposes. His intention was for Lori to inherit his interest in the property upon his death, such that she would become the sole owner.
Approximately eight (8) years after Lori was added to title, Nigel had a falling out with Lori. Consequently, Nigel's estate plans changed such that he no longer wanted Lori to inherit his home upon his death. The issue for Nigel, however, was that Lori's name remained on title to his home.
When Nigel asked Lori to remove her name from title, she refused. In doing so, Lori claimed that she had acquired a 50% interest in Nigel's home upon being added to title, and that Nigel could not take back something he had already given away. Nigel, of course, disputed that Lori had any claim to the property during his lifetime, or at all.
To address Lori's refusal to have her name removed from title of his home, Nigel severed the joint tenancy that he had with Lori and commenced a legal proceeding in the Superior Court of Justice to seek redress.
In his lawsuit, Nigel claimed that the only reason he added Lori to title was for estate planning purposes. Nigel argued that he did not intend for Lori to receive the gift of his home until after he died and contended that it was within his rights to alter his own estate plans insofar as his property is concerned, including changing his mind about who would benefit from his property upon his death.
The Court of first instance largely agreed with Nigel's position. The court determined:
1. That it was within Nigel's rights to sever the joint tenancy with Lori;
2. That Lori held her 50% interest in Nigel's property in trust for Nigel during his lifetime;
3. That Nigel retained all rights and interest in his property during his lifetime, and that he was free to encumber or sell the property; and,
4. That when Nigel dies, his 50% interest in the property would become part of his estate.
Although Nigel was largely successful in his lawsuit against Lori, one item that he was not successful on was the Court's finding that upon Lori's death, her 50% interest in the property would pass to her estate. As far as Nigel was concerned, he did not think that Lori should have any interest in the property whatsoever.
Lori disagreed with the lower Court's decision and exercised her right to appeal the decision.
On appeal, Lori claimed that upon being added to title of Nigel's home, she became a legitimate owner of the property with "full beneficial interest and immediate rights". Lori argued the lower court made an error in law by not arriving at this conclusion. Lori also contended that once an ownership interest in the property had been gifted to her, it could not be taken away.
To Lori's dismay, the Court of Appeal dismissed Lori's appeal and in doing so, upheld the lower Court's decision—but with one important exception. The Appellate Court entertained a last-minute cross appeal by Nigel, wherein Nigel argued that Lori should not have any interest in the property given the lower court's decision. The Court of Appeal allowed Nigel's appeal and agreed with Nigel's contention that Lori's interest in the property should be extinguished based on the court's decision and that 100% of the beneficial ownership in the property had vested in him. This, in turn, gave Nigel the ability to have Lori's name removed from title.
Although Nigel was able to reverse/undo his act of adding Lori to title of his Port Hope home, doing so was not without personal hardship to Nigel, all of which was entirely avoidable. Nigel spent three (3) long years in litigation—and likely spent many thousands of dollars in legal fees—to get Lori off title. Jackson is a perfect example of what can go wrong when adding someone to title of your home for estate planning purposes.
Footnote
1. Additional reasons can be found at the following citation: Jackson v. Rosenberg, 2025 ONCA 48
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
