Joint Asset Planning Kit

The Joint Asset Planning Kit

Joint Asset Planning Kit

The Joint Asset Planning Kit™ In The Media

The London Free Press

Estate Plan Rules Change

Kinda Leatherdale
London Free Press
Business

Here's a warning to parents who put assets under joint ownership with their children.

A new Supreme Court of Canada ruling could upset this estate planning strategy, often used to gift money to family while avoiding probate tax.

"Families need to know about this ruling," warned estate planning lawyer Les Kotzer, co-author of The Family Fight: Planning to Avoid It, and a new book, The Family War: Winning the Inheritance Battle.

I knew little about the laws surrounding this strategy, until a friend's mom died.

My friend was executor, and in settling the estate, discovered her mom had named an adult grandchild as co-owner of a $70,000 investment.

Her will did not mention the joint investment. What it did state was all her assets were to be divided between her two children. Her four grandchildren were to get $5,000 apiece.

Kotzer said joint ownership overrides the will and the $70,000 goes to one grandchild.

In the end this generous kid decided to share the windfall with his sister and cousins. But he didn't have to.

Now, under a Supreme Court ruling called the Pecore case, that could change. As Kotzer explained, joint names no longer ensures ownership.

In this particular court case, an aging father had a joint bank account with his daughter, who worked in low-paying jobs while supporting her quadriplegic husband.

The dad dies and leaves certain bequests to his daughter, her husband and children, but his will does not mention the joint bank account.

Later, the daughter divorces the husband. The husband claims he's entitled to part of the bank account.

The case goes to court. The daughter wins. Hubby appeals and loses again.

However in his ruling, the judge makes a statement that changes the strategy: Now, the person named on the joint account will have to prove the deceased intended to gift the asset.

And, with the estate of my friend's mom, that means family members could take the grandchild to court to force him to prove grandma intended the $70,000 go to him.

"This will definitely lead to family fights and potentially expensive court battles," warned Kotzer, a lawyer with Thornhill-based Fish and Associates who's developed a new kit to help parents avoid family fighting.

It's called the Joint Asset Protection Kit (www.jointasset.com), and works like this: "It follows the Supreme Court of Canada wording and declares your intentions upfront," explained Kotzer, adding it can either ensure the asset will go to the child named as joint owner, or declare all children inherit the money.

 

 

 

 

 

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