Sibling Left the Joint Account: Can the Estate Claim It Back in Ontario?

A parent dies. One of the children was on the parent's bank account, and that child now says the whole balance is theirs. The other siblings, or the executor, want to know whether that money belongs in the estate and is shared under the will.

The answer is not automatic in either direction. Survivorship is a strong rule, but Ontario courts also start from a presumption that an adult child added to a parent's account did not receive a gift. This article explains how that works and what tends to matter.

Why survivorship normally keeps the money out of the estate

Property passes to the estate trustee (personal representative) only if no one else has a right to take it by survivorship. Where survivorship applies, the property goes straight to the surviving owner and not into the estate, whether or not there is a will. The will does not override it, because the rule that sends property to the estate trustee applies only to property with no right of survivorship attached.

Federal guidance notes that many joint accounts carry a right of survivorship, so the surviving holder becomes the account owner. It also notes that any named holder can withdraw at any time. That is why the surviving child may say, on the face of the bank documents, that the money is theirs.

The Pecore presumption: a transfer to an adult child is not presumed to be a gift

In Pecore v. Pecore, 2007 SCC 17, the Supreme Court of Canada said that for transfers made without payment, the presumption of resulting trust is the general rule. The person receiving the transfer has to show that a gift was intended. An adult child added to a parent's account or asset without paying for it is presumed to hold it in trust for the parent and, on the parent's death, for the estate.

The opposite presumption, called advancement, treats the transfer as a gift. In Pecore it was confined to minor children. An adult child's financial dependency on the parent does not trigger it, although dependency can be strong evidence against a resulting trust.

So the starting point is that the estate may be able to claim the funds, and the child holding the account carries the burden of showing the parent meant a gift.

What a court looks at to decide the parent's intent

The question is what the parent intended at the time of the transfer. Courts can consider the following:

• The wording of the bank documents.
• Who controlled the funds and how they were used.
• Whether the parent granted a power of attorney.
• How the account was treated for tax.
• Later evidence, if it sheds light on the parent's intention at the time of the transfer.

A survivorship gift in a joint account is treated as made during the parent's life. The survivorship rights vest when the account is opened, and what is gifted is the survivor's interest in the balance at the time of death. This means the real dispute is usually whether the parent meant the child to have that survivorship interest, or only added the child for convenience, such as help paying bills.

Which facts will be enough depends on the full picture. Statements, account-opening forms and messages from the time can matter a great deal, so it helps to keep them.

How spouses are treated differently

Between spouses, the resulting-trust presumption applies as if they were not married, with two exceptions. Property held in both spouses' names as joint tenants is proof, without evidence to the contrary, that they intended to own it as joint tenants. Money on deposit in both spouses' names is deemed held as joint tenants.

Other kinds of claims may also exist in a family, such as dependant support or, for a married spouse, equalization. Those are separate from the resulting trust question and a lawyer can help sort out which apply.

Consequences for the estate and what to do next

For estate administration tax, the value of the estate includes property held in another person's name. A joint asset that the survivor holds on resulting trust for the estate does not escape the tax. By contrast, jointly owned property that passes automatically to the other owner is not counted. Whether the account falls in one group or the other is the very question in dispute. Federal guidance also warns that heirs may challenge the survivor, who may need to show the deceased intended the funds as a gift.

• Request the account-opening documents and statements going back as far as the bank will provide.
• Note who deposited money, who withdrew it and what it was used for.
• Find out whether a power of attorney existed and who acted under it.
• Collect tax records showing who reported the account's income.
• Gather messages or notes that show what the parent said about the account.
• If you are the executor, ask a lawyer how to handle the disputed amount. Once a dependant support application is served on the personal representative, they generally must not distribute until the court decides, unless everyone entitled to apply consents or the court orders otherwise.

If you are the surviving child, any named holder can withdraw from a joint account at any time, but heirs may challenge the survivor. How this applies to you depends on your situation, so it is worth confirming with a lawyer. If you are the executor or a sibling, a lawyer can help you assess the evidence and decide whether to raise a claim.

Frequently asked questions