Estate planning often involves complex decisions aimed at preserving family harmony and minimizing tax and probate costs.
But as the Ontario Superior Court’s recent decision in Vaccaro v. Vaccaro, 2025 ONSC 6521 illustrates well-meaning planning can sometimes result in years of dispute.
The Situation
In Vaccaro v. Vaccaro, a mother, transferred ownership of her home in Richmond Hill into joint tenancy with her three surviving children shortly before her death. The transfer was completed while she was in declining health and was carried out by one of her children acting under the mother’s power of attorney for property.
After her death, the three children sold the home, generating approximately $2.67 million in net proceeds. The funds were held in trust by their lawyer while the family attempted to agree on distribution.
After no agreement could be reached, one of the children applied to the court seeking immediate release of his one-third share of the sale proceeds. The other siblings objected, raising concerns that:
- The transfer of the property was not necessarily a gift, and the proceeds might actually be held on resulting trust for the estate.
- The transfer was completed by their sister acting under the power of attorney, raising concerns about whether it was authorized or in the deceased’s true interests.
- There were outstanding issues that should be resolved first, including loans the deceased had made to family members and the potential interests of the deceased’s grandchildren (through a predeceased sibling).
What the Court Decided
The Court refused to order any distribution of the sale proceeds at this stage.
The judge emphasized that the ownership of the funds could not be determined without a full evidentiary record, including:
- the deceased’s will,
- the scope and limits of the power of attorney, and
- evidence of the deceased’s intention when the property was transferred into joint tenancy.
Given the size of the funds and the possibility that other beneficiaries could be affected, the Court concluded that it would be unfair and premature to release any portion of the proceeds before the issues were properly resolved within the estate proceeding.
As a result, the sale proceeds remain frozen, pending further court direction or resolution through estate litigation or mediation.
Why This Matters for Clients
This case serves as an important reminder that adding children to title does not automatically resolve estate issues. While joint ownership is often used to reduce probate fees or simplify administration, it can create significant legal risk if:
- intention is not clearly documented,
- the transfer occurs during a period of diminished capacity, or
- the transaction is carried out by an attorney under the power of attorney without clear authority.
When disputes arise, courts may treat jointly held property as being held in trust for the estate rather than as an outright gift which can delay distribution and increase legal costs.
Key Takeaways
- Probate-avoidance strategies require careful planning and documentation.
- Joint tenancy transfers intended to avoid probate can create complex issues, especially if done when the transferor lacks capacity.
- Powers of attorneys must be exercised cautiously; Attorneys generally do not have the authority to make gifts or alter an estate plan unless the power of attorney explicitly permits it.
- Courts are cautious about ordering distributions of large estate assets when:
- testamentary intentions are unclear,
- there are potentially interested non-parties (like grandchildren), and
- the record is incomplete
Conclusion
Vaccaro v. Vaccaro demonstrates how quickly good intentions can lead to prolonged disputes and frozen assets. Clear legal advice, thorough documentation, and careful consideration of alternative planning tools can help families avoid uncertainty and costly litigation in the future.
