When purchasing a property, it’s common to consider adding a spouse, child, or relative as a co-owner—sometimes on a 50-50 basis as tenants-in-common—even if you are the one funding the down payment and mortgage. If your intention is to gift the share to your loved one, there is generally no issue. However, if you do not intend to gift this ownership share, there are legal risks and implications you should be aware of.
Legal Ownership and the Presumption of Advancement
If you register someone else as a co-owner of your property—whether it’s 50-50, 60-40, or another ratio—that person becomes a legal owner to the extent stated. When the co-owner is your spouse or child, the law presumes that you intended to gift that share of the property. This is known as the “presumption of advancement.”
This presumption can be rebutted, but only with clear evidence that the name was added for another purpose—such as administrative convenience due to age, illiteracy, or health issues. Numerous court cases arise after someone passes away where the surviving co-owner, often a family member, claims full or partial ownership based on their name being on the title, while other heirs challenge that claim.
A Case Illustration: When Intentions Are Misunderstood
Consider this example: Mr. A purchases a property, pays for it entirely, and registers it with his son, Mr. B, as tenants-in-common, 50-50. Mr. A’s reason is that he is elderly and illiterate, and needs help managing the property. He does not intend to gift half the property to Mr. B, because in his Will, it states that the entire property should be sold upon his death and the proceeds divided among all his four children.
However, once Mr A dies, Mr. B could argue that, under the presumption of advancement, his father had intended to give him 50% ownership of the property and that was why he registered 50% of the property in Mr B’s name. To avoid such a misunderstanding and a claim by Mr B, Mr. A and Mr B should execute a legally binding document—signed in front of a lawyer—stating:
- B’s name was added as co-owner not as a gift, but for convenience.
- B was added solely to assist with administrative matters due to Mr. A’s age and literacy issues.
Such a signed document puts to rest any uncertainty or argument by Mr B later on that Mr A had intended to gift 50% of the property to him as the document clearly states that it was not the case. This agreement should also be made known to all family members so they can act as witnesses if a dispute arises. Open communication helps prevent future probate conflicts, especially those that may require the intervention of a probate litigation lawyer.
When a Mortgage Is Involved: Further Legal Complexities
The situation becomes more complex if a mortgage is taken out and the family member is listed as a co-borrower. For example, Mr. B may be added as a co-borrower to the loan to satisfy the bank’s requirement for a younger borrower. Even if Mr. A pays all the loan repayments, in law, the court will consider Mr. B to have contributed half of the repayments unless there is a clear agreement made at the time of purchase and mortgage signing.
This agreement should state that:
- A is responsible for all mortgage repayments, and
- B has no beneficial interest in the property despite being a co-borrower.
Failing to document this understanding can lead the court to presume that Mr. B owns part of the property, based solely on his status as a co-borrower of the loan.
Protect Your Intentions with Proper Documentation
If you do not intend to give away a share of your property, the safest course is not to add someone else’s name as a co-owner in the first place.
However, if you’ve already done so and did not mean it as a gift, act promptly:
- Either remove his name from the legal title now, or
- The 2 of you sign a formal declaration clarifying your original intent.
These preventative steps can save your loved ones from painful legal disputes after your passing—and reduce the risk of costly proceedings involving a probate litigation lawyer.
Need clarity on property ownership and legal intentions?
Doris Chia brings deep expertise in navigating disputes over property co-ownership, family gifts, and inheritance claims. Whether you’re looking to protect your intentions, prevent misunderstandings among heirs when it comes to inheriting wealth, or resolve a property dispute involving a spouse or relative, Doris provides clear, strategic advice tailored to your situation.
If you’ve added a loved one as a co-owner—or are dealing with contested ownership after a death—Doris can help you safeguard your rights and avoid costly legal battles.
Contact Doris Chia today to ensure your property is managed with legal clarity and your legacy remains protected.
