Probate is the legal process of validating a deceased person’s will and granting authority to an executor to manage and distribute their estate. However, when assets are jointly owned, probate may not always be required. In British Columbia, whether probate applies to joint assets depends on the ownership structure and the type of asset involved.
The most common form of joint ownership is joint tenancy with the right of survivorship. This means that when one owner dies, their share of the asset automatically transfers to the surviving owner(s) without passing through probate. Joint tenancy is commonly used for real estate, bank accounts, and investments. Since the asset transfers directly, it is not considered part of the deceased’s estate, and the executor does not need to include it in the probate application. However, financial institutions or the Land Title Office may still require proof of death, such as a death certificate, before releasing funds or updating ownership records.
Conversely, if an asset is owned as tenants in common, probate is usually required. In this form of ownership, each person holds a specific share of the asset, and their portion does not automatically pass to the surviving owner. Instead, it becomes part of the deceased’s estate and must go through probate before being distributed according to the will. This is common in business partnerships or real estate investments where co-owners want their share to pass to heirs rather than the other owner.
Although joint ownership can be a useful estate planning tool to avoid probate, it is not without risks. Adding someone as a joint owner on a bank account or property means they have immediate legal ownership, which can expose the asset to their creditors, legal disputes, or unintended claims. Additionally, if joint ownership was added late in life without clear documentation, disputes may arise over whether it was intended as a true joint ownership or just a convenient way to manage finances. In some cases, the court may rule that the asset still belongs to the estate and should be probated.
Proper estate planning is essential when dealing with joint assets. While joint ownership can simplify the transition of assets and avoid probate fees, it should be carefully structured to prevent legal complications. Consult with Northam Law today to learn how we can assist you in making the right decision for your estate planning process.
Related articles:
Probate : What It Is and When It Is Required
Estate Planning FAQs: Pros and Cons of Changing Your Property Title
