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. The cost to obtain probate rarely justifies the legal complexity or future risk of joint ownership with an adult child.

Here are some factors to consider:

1. Maintain sovereignty over your home

Your home is likely your most valuable asset, whether emotionally, financially, or both. By adding an adult child to title you no longer have full control over your home. If your child later faces separation or divorce, insolvency or bankruptcy, or is sued, your home could become exposed to their creditors or ex-spouse(s).

You may also lose flexibility in selling, refinancing, or gifting your home later.

2. The probate “savings” are often minimal.

If monetary costs are the concern, compare apples to apples.

In Alberta, probate fees are modest compared to other provinces. The maximum surrogate filing fee is $525 + GST; Filing fees depend on the net value of the estate.

You might factor in potential legal fees and other expenses 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. Our standard fees are posted on our website.

When evaluating costs be sure to consider the cost to register a new land title. There are land registry fees in Alberta when adding someone to title.

The land registry fees at Alberta's Land Titles Office (LTO) is $50 + ($5 per $5,000 of property value). Estimate those registry fees using our Land Titles Estimator here. 

You might factor in potential legal fees and other expenses if you hire a lawyer to help with this land title's process. Our standard fees are posted on our website.

Lastly, 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 potential downsides to joint ownership with adult children often outweigh any “savings” from avoiding probate.

3. Tax consequences and future problems

Adding an adult child to title can trigger unintended capital gains tax. Adding anyone to title triggers a deemed disposition for Canada Revenue Agency (CRA) tax purposes. 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.

Seek tax advice from an accountant to determine the potential tax consequences of your transaction.

4. Alternatives exist

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.

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 costs may not be advisable.

Maintaining full ownership over your home allows you to retain control and flexibility during your lifetime, and enables you to ensure that your Will and 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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