Life Insurance in Richmond: The Name You Put on the Title

What a family has usually already done

In a great many households here the estate plan was made years ago and consisted of a single signature. A parent's name went onto an adult child's property, or an adult child's name went onto a parent's, and the family has treated the matter as finished ever since.

Nobody involved thought of it as a transaction. It was a practical step taken between people who trust one another, meant to spare somebody trouble later, and it was usually suggested by somebody helpful rather than by anyone paid to think it through.

It is the most used estate device in this country and the least examined. What follows is not an argument against it. It is an account of what a household has actually done when it puts a name on something, and of the parts that were never raised at the time.

What survivorship actually accomplishes

Property held in joint tenancy carries a right of survivorship. When one joint tenant dies, that person's interest passes to the surviving joint tenant by reason of how the title is held, rather than through the will and rather than through the estate an executor administers.

That is real and it is why the arrangement is everywhere. There is no grant to wait on, no accounting to sit through, and nothing standing between a survivor and the roof over their head. The register is corrected and the survivor holds the whole of it.

Everything else on this page concerns the price of that convenience. Not the fee or the months avoided, both genuine, but what comes attached to placing another living person on a title.

The transfer happens on the day, not on the death

Registering somebody as a joint tenant gives that person an interest in the property now. Not later. From the moment the transfer is registered there are two owners where there was one, and the second is a person holding rights rather than a name waiting in a queue.

That is what separates it from a will. A will disposes of nothing while its maker is alive and can be rewritten quietly on any wet afternoon. A joint title cannot be corrected by changing your mind, because the change has already occurred and somebody else holds part of what changed.

Reversing it generally requires that person's cooperation, or a court. A household that added a name in a warm year and wants it removed in a cold one has met the difference between an instrument that speaks at a death and one that spoke on the day it was signed.

Whose property is it, and the question of intention

When a parent transfers property to an adult child for nothing, the law asks what the parent meant by it. A transfer without payment may be a gift of a beneficial interest, or an arrangement in which the child holds for the parent and the beneficial interest never moved. The two look identical on a title search.

The Supreme Court of Canada considered gratuitous transfers of that kind between a parent and an independent adult child in Pecore v Pecore, 2007 SCC 17. What a court examines is the transferor's intention. This page says the case exists and that intention is the question it turns on. It states no rule, because the outcome in any family follows from that family's facts.

Which makes this a British Columbia lawyer's work, and cheap while everybody is alive. Intention is far easier to establish from a document prepared at the time than from survivors who each remember a different conversation. A page cannot tell you what your transfer meant, only that the question exists and gets answered once you are no longer there to answer it.

Somebody else's creditors are now in the room

An interest held by a joint owner is that person's property. Whatever a family privately understands the arrangement to be, the register records an owner, and an owner's assets are ordinarily available to that owner's creditors.

So a parent who added a child's name has fastened the family home to somebody else's working life. A guaranteed loan, a venture that did not succeed, a judgment arising from something nobody in the household heard about: each reaches for what the debtor owns, and what the debtor owns now includes an interest in a house the debtor never paid a dollar toward.

How far a creditor can reach, and by what process, is a matter of law and of facts. It belongs with a British Columbia lawyer, not a website. What belongs here is that the exposure did not exist before the name went on, and nobody mentioned it while the pen was out.

A separation in the other household

The second exposure arrives through a marriage that is not yours. An adult child whose name sits on a parent's title holds an interest in property, and interests in property are among the things British Columbia family law weighs when a relationship ends.

Whether such an interest is divisible, and to what extent, depends on the legislation and on the facts of that relationship. No general page can settle it, and any page that answers confidently in either direction is guessing on your behalf.

What can be said is that the question is now live. Before the transfer, a parent's home had nothing to do with a child's spouse. Afterwards it is a fact in somebody else's separation, discussed by people the parent may never have met, at a time chosen by neither.

The tax event nobody planned for

A transfer of property can be a disposition for tax purposes even where no money changes hands. Fair market value can be substituted for the price nobody paid, an accrued gain can become reportable, and an amount can fall due for a year in which the family believed it had tidied its paperwork.

Whether that happens depends on what the property is, how it has been used, and what has been claimed against it over the years. A principal residence, a rental unit, farmland and a second property are four different answers, and there are more than four.

This is an accountant's question, worth asking before the transfer rather than after. A registered transfer is rarely improved by later advice, and an hour with somebody holding your documents costs little measured against finding out in a reassessment.

Land held a long time, in a city that grew up around it

Richmond holds a great deal of property that has stayed in the same family for decades. Lots in Steveston, houses put up when the streets around them were new, and land inside the provincial Agricultural Land Reserve that was worked long before the neighbourhood arrived beside it.

A holding of that kind produces exactly the conditions this page describes. The value is large, the accrued gain is large, the family is attached to the thing rather than to what it would fetch, and the wish to keep it in the family is what makes adding a name feel obvious.

It also produces a household whose first question differs from the ones this site's other pages answer. A Burnaby family whose home is a unit in a building, a Victoria household that has finished earning, and a Surrey house holding three generations each start somewhere else. Here the starting point is whose name is on what, and when it got there.

The fee this is usually meant to save

British Columbia charges a fee under the Probate Fee Act. No fee is payable where the value of the estate does not exceed twenty five thousand dollars. Where the value exceeds twenty five thousand but is not more than fifty thousand, the Act charges six dollars for every one thousand dollars or part of one thousand dollars above twenty five thousand. Above fifty thousand it charges fourteen dollars for every one thousand dollars or part of one thousand dollars.

That is the charge a household is usually trying to avoid when it makes a title joint. It is real, worth knowing, and can be worked out ahead of time from figures the family already holds. That last quality distinguishes it from nearly everything else the same signature sets in motion.

Set the saving beside the exposures and look at both at once. A creditor's claim, a separation, an unplanned disposition and a dispute about intention can each cost a family many times the fee, and none can be calculated in advance. A household that has made that comparison and still wants the joint title has reached a decision rather than repeated a habit.

Wills variation, and what is left to argue over

British Columbia allows a court to vary a will. Under section 60 of the Wills, Estates and Succession Act, where a will does not in the court's opinion make adequate provision for the proper maintenance and support of the will-maker's spouse or children, the court may order the provision it thinks adequate, just and equitable.

Section 61 sets the window. A proceeding must be started within one hundred and eighty days from the date the representation grant is issued in British Columbia. Whether a particular will is exposed is a question for a British Columbia lawyer holding the family's real facts, never for a page such as this one.

Joint ownership meets that provision in a way families rarely anticipate. If the largest asset passes by survivorship, the estate the will governs may be modest, and a child who received little under a will that governs little will look instead at the transfer itself and at what the parent intended by it. The disagreement does not disappear. It changes address.

The account with two names on it

The same arrangement is made with accounts far more often than with land, and with less thought. A parent adds an adult child so bills can be paid and errands run, a form is signed at a counter, and nobody asks what the signature means beyond convenience.

Convenience and ownership are different intentions and the form does not distinguish them. The child may be meant to help, or to receive what is left, or to hold it for everybody. All three families sign the same paper and none writes down which one they are.

This is the fact pattern courts have had to untangle repeatedly. It is why recording what was meant, at the time, in a document a lawyer prepared, is worth more than any assurance given verbally to one person in a kitchen. Memory is not evidence, and the one person who could settle it is the person who has died.

What a designation does that a title cannot

A beneficiary designation on an insurance contract reaches the survivorship result without giving anybody a present interest. The named person owns nothing while the owner of the contract is alive, cannot deal with it, cannot encumber it, and brings neither creditors nor a separation near it.

On a death the insurer pays that person under the contract. Proceeds paid to a named beneficiary pass outside the estate, so they wait on no grant and no executor's accounting, and form no part of the value a probate fee is calculated on. It is the destination a joint title was chosen to reach, arrived at without the passenger.

A designation is revocable unless it is made irrevocable, which is the common law position in this province. The owner may change it at any time, and an out of date name stays in force until somebody does. That is a weakness and a strength in the same sentence, and the reverse of what a married or civil union spouse meets in Quebec. See estate planning for how the written instruments sit around one another.

The survivor holds the property and the estate holds the bill

Passing an asset by survivorship does not pass the obligations attached to it. A disposition arising at death is dealt with in the deceased's final return, and an executor administers whatever remains inside the estate, which after a lifetime of adding names may be little.

So a family can arrive at a poor arrangement while trying to be efficient. The valuable thing has gone to one person outside the estate, and the amount owed is charged against an estate holding little to pay it with. Whoever received the property is not automatically the person who owes the money, and that discovery is made under time pressure by people who are grieving.

Money that arrives quickly and from outside is what settles a problem shaped like that, and it is the narrow job an insurance contract does here. It is not by itself a reason to arrange one, but a reason to ask an accountant what the estate would owe before concluding that a title has taken care of everything.

What to check this month, none of which costs anything

How the title is actually held. Not how the family describes it at dinner. A search shows the registered owners and the manner in which they hold, and a household that has never looked is often surprised by what the register says.

What the account documents say. The card or agreement for every account carrying more than one name, and whether anything on file records what was intended rather than what was convenient on the day.

Who is named on every contract you already hold. Primary and contingent, on individual coverage and on anything held through work. One call to each insurer, free, and the single item most often found to be out of date.

Whether the will still matches the titles. A will dividing an estate evenly, sitting behind titles that send the largest assets to one person, is a document at war with itself, and a family finds that out in the year it can least afford to.

The order that costs a household least

An employer match comes first, always. It is a return that costs the household nothing, it requires nothing to be bought and nobody to be met, and it is taken before anything on this site becomes relevant.

Expensive debt comes second. A household carrying a balance at a real rate of interest is not a candidate for a funding commitment measured in decades. Saying so costs this practice work and remains the right answer.

Only after both is there a surplus question at all. What is discussed here begins with money that would otherwise sit uncommitted for a very long time, and a proposal that reverses the order has told you what it is for before anything else. See the order that costs least for the same argument written without a product inside it.

Who this page is not for, and what it will not tell you

It will not tell you that your joint title was a mistake. It may be exactly right, many families would choose it again with the whole picture before them, and the complaint here is that the picture was never laid out.

It is not for a household without durable surplus, nor one with a horizon of a few years, nor anybody shopping on rate of return. Early cash value sits well below the premiums paid, the funding commitment is real, and this is insurance, regulated as insurance, whose primary purpose is the death benefit. See who this does not suit for the case written against the method rather than for it.

And it will not price anything or settle your family's facts. A design depends on age, health, cash flow and purpose. Whose interest passed, what a transfer triggered and what a will is exposed to depend on documents, and those belong with a British Columbia lawyer and an accountant holding them.