Joint Bank Account With a Parent: Who Gets It in Ontario?

A parent adds one child to a bank account "for convenience". Years later the parent dies, and the other children learn the account now sits with the child who was on it. Was it a gift to that child, or money that was only held for the parent and now belongs to the estate?

This page explains the idea of a resulting trust in plain words, the kind of evidence that tends to come up, and how the tax and deadline rules connect. Every family's facts differ, so treat this as orientation and not a prediction.

Why joint accounts cause disputes

Jointly owned assets that automatically go to the surviving owner are treated as passing outside the estate when Estate Administration Tax is calculated. That is why these accounts are popular. It is also why they cause conflict: the money can be large, and it may leave the other beneficiaries with far less than the will suggests.

The real question is usually not who is named on the account. It is what the parent intended when the name was added.

What a resulting trust means

A resulting trust is a legal idea that a person who holds title to property may be holding it for someone else instead of owning it outright. In a joint account dispute, the argument is that the child on the account only held the money for the parent, so it returns to the parent's estate.

The other side argues the parent meant the child to have the money, either as a gift or as a right of survivorship. Which side prevails turns on the evidence and on the law as applied to your facts. A lawyer can tell you how a court is likely to approach your particular account.

Evidence that usually matters

If the account is challenged, the parties generally try to show what the parent intended. These are the kinds of things a lawyer will ask about:

• The bank's account-opening documents and any signed forms about ownership.
• Who deposited the money, and who actually used it.
• Whether the parent gave any explanation, in writing or to others, about why the name was added.
• Whether the account was used for the parent's bills, or for the child's own spending.
• Whether interest on the account was reported on the parent's tax return or the child's.
• Any conversations with the parent's advisers, bank staff or family.

Estate Administration Tax and filing

The answer affects the size of the estate. Jointly owned assets that automatically go to the surviving owner are excluded from the value used for Estate Administration Tax. But Ontario includes in the estate value any property the deceased owned that was held in another person's name, and putting legal title in another name does not by itself remove a beneficially owned asset.

So an account that is found to belong to the estate may increase the tax. The tax is $15 for each $1,000, or part of $1,000, by which the estate value exceeds $50,000, for applications made on or after January 1, 2020. It is payable immediately when the estate certificate is issued.

The estate representative must file an Estate Information Return within 180 calendar days after the estate certificate is issued, and a false or late filing can lead to a fine of at least $1,000 and up to twice the tax payable, up to two years in prison, or both. If the ownership of an account is uncertain, get advice before the return is filed.

Deadlines and next steps

The general limitation period in Ontario is two years from the day a claim was discovered. A claim is discovered when the claimant knew, or reasonably ought to have known, of it. There is also a 15-year ultimate period, which does not run while the defendant wilfully conceals the loss, though the claimant must prove the concealment. Do not assume you have time; confirm the dates for your situation.

A person who appears to have a financial interest in an estate may bring a motion for an order requiring the estate trustee to pass accounts. That can be one way to get a full picture of what the estate holds.

• Ask the bank for statements and account-opening records, going back as far as it will provide.
• Write down what you know about the parent's wishes and when you learned of the account.
• Do not move or spend money from the account until you know who it belongs to.
• Speak to a lawyer early, before deadlines pass or the estate return is filed.

Frequently asked questions