Does a Joint Account Belong to the Survivor or the Estate in Ontario?

A parent or spouse has died, and a bank account was in two names. The survivor may think the money is theirs. Other family members may say it belongs in the estate. Both positions can be argued, and the answer is not decided by the name on the account alone.

This article explains how Ontario treats joint accounts after a death, how the presumption of resulting trust works, and what evidence matters. It is general information, not advice on your situation.

Two possible outcomes: survivorship or estate

Many joint accounts carry a right of survivorship. If so, the surviving holder becomes the account owner.

Property that passes by survivorship goes directly to the surviving owner and does not go into the estate, whether or not there is a will. A will cannot redirect it, because the rule that sends property to the estate trustee applies only to property with no right of survivorship attached.

The dispute usually is not about whether survivorship exists in the bank's paperwork. It is about whether the deceased truly meant the survivor to keep the money, or only put the survivor's name on the account for convenience.

The presumption of resulting trust for adult children

For gratuitous transfers, meaning transfers where nothing was paid, the presumption of resulting trust is the general rule. The person who receives the transfer must show that a gift was intended.

In practice, an adult child added to a parent's account without paying anything is presumed to hold it in trust for the parent and, on death, for the estate. The presumption of advancement, which treats a transfer as a gift, is confined to minor children. An adult child's financial dependency does not trigger it, though it can be strong evidence against a resulting trust.

The survivorship interest is treated as a gift made during the parent's life, made when the account is opened. What is gifted is the survivor's interest in the balance at the time of death.

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.

A surviving married spouse may also elect equalization of net family property. Property the survivor receives by right of survivorship is credited against that entitlement. The credit does not apply if a written instrument says the survivor receives the property in addition to the equalization entitlement. Unmarried partners cannot elect equalization.

What evidence can decide the question

Courts can look at several kinds of evidence about what the deceased intended when the account was set up:

• The wording of the bank documents.
• Who controlled and used the funds.
• Whether a power of attorney was granted.
• How the account was treated for tax.
• Later evidence, if it is relevant to the intention at the time of the transfer.

Heirs may challenge the survivor, who may then need to show the deceased meant the funds as a gift.

Other effects worth knowing about

• Estate administration tax: jointly owned property that passes automatically to the other owner is not counted in the estate value. A joint asset the survivor holds on resulting trust for the estate does not escape the tax.
• Dependant support claims: for a support claim, money deposited in an account in the deceased's name and another person's can be deemed part of the net estate. Only the portion that belonged to the deceased before the deposit is counted, and the claimant must prove that.
• Creditors: if one holder has financial problems or goes bankrupt, creditors could make claims on the money.
• Simultaneous deaths: if all holders die at the same time, or it is uncertain who survived, they are each deemed to have held as tenants in common, unless a contrary intention appears.

What to do next

• Get the account opening documents and any later changes from the bank.
• Collect records showing who deposited, who withdrew and who paid tax on the interest.
• Note whether a power of attorney existed and who used it.
• Ask the bank what its own requirements are for a joint holder after a death, since it sets its own documentation rules.
• Do not distribute or spend disputed funds until you have advice.
• Speak with an Ontario estates lawyer, especially if family members disagree about who should receive the money.

Frequently asked questions