Quote:
Originally Posted by Slava
I don't know if that stands up though. It's a joint asset, and if someone invests those funds and has a gain it's taxable. You could argue that they're not really yours, but as you know, they legally are. I don't think it's an issue with a minimal amount (and no one would be concerned with that).
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You don't do it with a giant pile of assets though. If it's like $50K or less and mostly cash/GIC for administrative purposes, it's no big deal. CRA only cares that the full value of the interest is taxed in someone's hands. A few hundred dollars in interest isn't much at all for CRA to be worried as long as 100% of the income has been declared by someone (ie: 50:50 or 100%).
I've seen this happen a lot. CRA hasn't made a huge fuss about it unless it was a gigantic amount in a joint name (which people don't generally do anyways).
Tax payer still moves other cash into those accounts to replenish if needed (if they want to keep assets vs distribute to the kids immediately).
Joint names on the house are usually the problem though. It's hard to get away from the idea that the house isn't at least 50:50 if the individual is still living there and it can definitely mess up a principal place of residence exemption. People do this for administrative purposes often without realizing they've done a deemed disposition and they've potentially messed up royally for tax purposes because principal place of residence exemption reasons (I've seen this error a few times already, especially in BC).
Additionally, "avoiding probate" is only a problem if the siblings aren't cool with each other. I've seen some fancy things people have done to avoid probate. So fancy that the siblings had to have had good relationships and trust with each other to execute. They should have just let it go to probate or had the assets distributed/deemed disposed ASAP while parents were alive vs spending more time and effort on things like asset sale and repurchase rotation situations until the parents pass away.