BEING ON TITLE WITH YOUR CHILD

Some parents outright buy homes for their kids, in many cases downsizing to a smaller house for themselves to help pay for it, but Clay Gillespie, a financial planner and managing director of Rogers Group Financial, cautions against it.

“As long as the parent is not impinging on their ability to maintain their retirement or lifestyle, I don’t care,” he said. “My objective is for them to make sure their lifestyle is not at risk.” He adds that if you have access to money, it makes sense to give it your estate beneficiaries ahead of time.

Gillespie suggests if you are not on title with the property, take a mortgage on the in case your child gets divorced. “The problem if you own title, you start messing up the principal residence (exemption),” he said.

Toronto real estate lawyer Bob Aaron said if you’re trying to protect your wealth from a child’s marital breakup, being on the title might not be your best answer. He suggests a pre- nuptial or cohabitation agreement. “If you have loaned your children money, you can also put that on title as a mortgage,” said Aaron, adding t he banks will sometimes not allow any secondary financing.