Should you add your adult children to your home title to avoid probate in Alberta?

It’s a common question of lawyers: Should I add my adult child to the title of my home so that it passes to them automatically when I die, avoiding probate?

At first glance, it sounds efficient. But in most cases, it’s not the best approach. I find myself advising clients against it more often than not.

1. Maintain sovereignty over your home

Your home is likely your most valuable asset, whether emotionally, financially or both. Adding an adult child to title means you no longer have full control over it. If your child later faces divorce, insolvency or bankruptcy, or is sued, your home could become exposed to their creditors or ex-spouse. You may also lose flexibility in selling, refinancing, or gifting your home later.

2. The probate “savings” are often minimal: If costs are the concern, compare apples to apples

In Alberta, probate fees are modest compared to other provinces. Alberta's maximum surrogate filing fee is $525 + GST. The filing fees may be lower and depend on the net value of the estate. Yes, there may be legal fees and other expenses in addition to the filing fee if the executor hires a lawyer to help obtain probate. Legal fees in Alberta aren’t fixed or regulated; they’re set by the free market, so rates vary between firms.

When balking at probate costs be sure to consider what the cost will be to register a new land title. There are land registry fees in Alberta to add someone to your title. Alberta's Land Titles Office charges $50 + ($5 per $5,000 of property value). Estimate those land registry fees using our Land Titles Estimator here.  And yes, there may also be legal fees and other expenses if you hire a lawyer to help with this land title's process. Also, if there's a mortgage on title, then there are additional factors related to the lender that must be considered before updating title.

Generally, the cost to obtain probate rarely justifies the legal complexity or future risk of joint ownership with an adult child. In other words, the potential downsides to joint ownership with adult children often outweigh the “savings” from avoiding probate.

3. Tax consequences and future problems

Adding a child to title can trigger unintended capital gains tax. If the child already owns their own home, your property may no longer fully qualify as your principal residence. When the property is sold or transferred after your death, there could be a taxable gain on their share.

Beyond the potential tax problems, joint ownership with your adult child can also complicate estate equalization. Other children or beneficiaries may feel unfairly treated, especially if the intention behind adding the child wasn’t clearly documented.

4. Alternatives exist

If your goal is to simplify your estate, consider other strategies, such as:

• A well-drafted Will and updated beneficiary designations

• Trust arrangements, when appropriate

Each tool carries its own risks and benefits, which should be reviewed with your lawyer and accountant in the context of your entire estate plan.

The Bottom Line

Adding an adult child to title only to avoid probate is usually not advisable. Maintaining full ownership over your home allows you to retain control and flexibility during your lifetime, and enables you to ensure that your estate plan reflects your true wishes. Before adding your adult child (or anyone) to your title, seek legal and accounting advice.

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General information only. This isn’t legal advice and reading or responding to the article does not create a solicitor-client relationship. Laws change and outcomes depend on specific facts of each case.

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