1. Ways to Transfer Property on Death

As described below, there are various ways to transfer property on death such as property held JTWROS, Designations of beneficiary/successor, using a Trust created during your lifetime (also called an Inver Vivos Trust) and, of course, by Will.

(a) JTWROS
One way for your interest in property to pass on your death is by owning it jointly with a right of survivorship (“JTWROS” and such property is a “JTWROS Property”) with another person or persons (the “Other Holder(s)”). For example, this would include owning real estate in joint tenancy and in many cases, being the joint account holder of investments and bank accounts. Upon death of an owner, beneficial ownership of (for example, the right to use and enjoy the benefits of the asset) and legal ownership (title) to such an asset is extinguished and the legal ownership of the other surviving Other Holder(s) is(are) increased by operation of law. [Where married spouses and unlikely that are or will be holding property JTWROS others, add: Since you are married, pursuant to the Family Law Act, there is a presumption that for a JTWROS Property, the full beneficial ownership of the JTWROS Property passes to the survivor on the first of you to die. If your goal is that everything is to pass to the survivor with the least amount of trouble and cost, you may wish, where possible, to hold all assets JTWROS. Where you do so, when the first of you dies, the asset passes directly to the survivor, not through the deceased’s Will and therefore does not form an asset of the deceased estate, and, among other things is not subject to EAT. In fact, if, on the first of you to die, there are no assets requiring probate to transfer ownership, the deceased’s Will may not have to be submitted for probate at all (also see below under the heading “Designations”). Accordingly, you should check registration of ownership on all applicable assets (including real estate, bank accounts, investment accounts, loans secured by mortgages) and consider changing registration of ownership where not the case. Let me know if you would like to discuss this further.]

[Where common law spouses and/or may be holding property JTWROS others, add: However, the beneficial ownership of the asset of the surviving Other Holder(s) may or may not increase by the extinguishment of the deceased’s beneficial ownership – entitlement to beneficial ownership depends upon a determination of the intention of the deceased at the time the joint ownership was established. For example, suppose that A and B set up a JTWROS bank account and A transferred funds to that account and B did not. If A were to die before B, who is entitled to the beneficial ownership of the account will depend upon A’s intention at the time of establishing the account. Did A intend on A’s death that: (1) B receive beneficial ownership (to use as B chooses) or (2) B hold A’s interest in the account on what is known as a resulting trust for A’s estate or in trust for other persons (which could include B)? To reduce uncertainty, the best practice is for A to document A’s intention at the time of establishing the account. Where there is no clear evidence of A’s intention, there are certain presumptions. In Ontario, if B is a married spouse or minor child of A, there is a presumption that A intended B would receive the beneficial ownership of the account on A’s death and in such case, EAT should not be payable. Otherwise, the presumption is that B holds the account in trust for A’s estate and likely will be subject to EAT. Accordingly, where it is your intention that the Other Holder(s) who are not your married spouse or minor child(ren) receive the JTWROS Property for their own personal use, it is important to document your intention of such at the time of acquiring the JTWROS Property or at the time of transferring such property so that it is JTWROS Property, as the case may be. One way to document your intention is by signing a memorandum or letter stating your intention regarding what the Other Holder(s) receive on your death. We suggest that you leave that memorandum or letter with your original Will, or in another place that you keep your important papers, so that you executor will become aware of it. We would be pleased to assist you in ensuring that you so document your intention.

(b) Designations
Another way for you to transfer property on your death is to designate or declare (in either case I refer to this as “Designate” or “Designating”) as beneficiary, successor annuitant or successor holder, as the case may be, of registered assets (e.g., RRSPs, RRIFs, LIRAs, LIFs, TFSAs), pension plans and life insurance.

(i) #designatingmarriedspouseDesignating a Married Spouse
Since you are married, if you Designate each other, the deceased’s interest will pass to the survivor directly, not through the deceased’s Will, and will not form a part of the deceased’s estate and therefore not subject to EAT. I note that I recommend with respect to RRIFs, that you each be set up as the other’s successor annuitant since it is simpler for the surviving spouse to deal with it. I also recommend that with TFSAs, that you each be set up as the other’s successor holder since it will allow the surviving spouse to retain the deceased’s TFSA just like their own TFSA except that the survivor cannot add new funds to it. [Where married spouses and unlikely that are or will be designating others, just include this and can delete the subparagraph heading.]