Joint Account With a Parent Just for Convenience: Whose Money Is It?

Many adult children are added to a parent's bank account so they can pay bills, buy groceries or deal with the bank when the parent is unwell. The parent never meant to give them the money. Then the parent dies, the bank says the account is now yours, and the other family members say it belongs to the estate.

This article explains in plain language how Ontario treats that situation. The answer depends on facts, and some questions are not covered here, so treat this as a map of the issues. A lawyer can tell you how they apply to your account.

Why the bank may treat the account as yours

Ontario's government lists money and property that is jointly owned with another person as one of the kinds of assets that are distributed depending on how they are owned, and gives a joint bank account as an example of a designated-beneficiary type asset. In other words, a joint account can pass outside the estate on death.

The general rule behind this is the right of survivorship. It applies only to interests held in a joint tenancy, and property that does not pass by survivorship goes to the deceased's personal representative. If the account really was a joint holding, the bank may release it to you without involving the estate.

That is not the end of the question. How an account is registered shows how it is held on paper. It does not necessarily show what your parent meant when they added your name.

The real question: what did your parent intend?

When someone puts property into joint names without receiving anything in return, the person who received it has the onus of showing that a gift was intended. A judge starts with the applicable presumption and then decides the transferor's actual intention on a balance of probabilities.

The Court of Appeal for Ontario has also said a trial judge made an error by putting the onus on the person who received the property when it was jointly registered, instead of starting with the presumption of resulting trust. A resulting trust, in simple terms, means the property is treated as held for the person who put it in, and so for their estate. That decision concerned jointly registered property, so a lawyer should confirm how it applies to a bank account like yours.

Evidence of your parent's wishes after the transfer can be considered only if it relates to their intention at the time of the transfer. Courts must also guard against evidence that is self-serving or reflects a later change in intention.

Evidence that tends to matter

What counts as good evidence depends on your facts, so the examples below are practical ideas rather than legal tests.

Keep in mind that your own after-the-fact account of what your parent wanted can be treated with caution, because courts must guard against self-serving evidence. Independent records made at the time generally carry more weight than recollections.

What it means for the estate, probate and tax

Estate Administration Tax leaves out of the estate's value assets under joint ownership that automatically become assets of the other owners. For estate certificates applied for on or after January 1, 2020, the tax is $15 for every $1,000 (or part of $1,000) of estate value over $50,000. So whether the account is treated as the estate's can change the tax bill.

If the estate trustee takes the position that the account was held only for convenience, the money would be an estate asset and would count towards that value. Ontario also says probate is normally required if the deceased held assets at a financial institution, and disputes are one of the triggers for applying.

• The tax is due the day the estate certificate is issued.
• An Estate Information Return must be filed within 180 calendar days after the certificate is issued, even if the estate is worth $0.
• Estates valued up to $150,000 can apply for a Small Estate Certificate, and larger estates apply for a Certificate of Appointment of Estate Trustee.

What to do next

• Do not move, spend or withdraw money from the account until you understand whose it may be.
• Ask the bank in writing what it has recorded about how the account is held and when your name was added.
• Collect statements, account-opening documents and any messages about why your name was added.
• Write down what your parent told you and when, but expect it to be tested against records made at the time.
• Tell the estate trustee openly that you were named for convenience if that is the case, so the money can be accounted for properly.
• Speak to an Ontario estate litigation lawyer before agreeing to anything or paying money out, because limitation and other deadlines can apply and a lawyer can confirm them.

Frequently asked questions