Joint Bank Accounts and Estates in Ontario: Who Gets the Money?

When someone dies and a joint bank account is involved, two questions arise. The first is how the account is held. The second is whose money it really was. People are often surprised that the answer to the second question can send the funds into the estate even when the bank treats the survivor as the owner.

This article explains the general approach Ontario courts take, mainly where a parent added an adult child to an account. Every account depends on the facts, so use this as background for a conversation with a lawyer.

Survivorship versus the estate

Some assets pass outside the estate, by joint ownership with survivorship or to a designated beneficiary. Whether probate is needed depends on the asset: it is usually needed for real property that does not pass by survivorship and for assets held by financial institutions. Plan benefits such as RRSPs, RRIFs and pensions can likewise go to a designated person by signed instrument or by will.

But the label on the account is not always the end of the story. In a dispute, a court asks whether the person who put the money in meant the other holder to own it beyond death, or only to help manage it.

The presumption courts apply

Under the Pecore principles, a gratuitous transfer from a parent to an adult child, including into a joint account, is presumed to be held on a resulting trust for the parent's estate. In plain terms, the starting assumption is that the parent did not give the child a gift, so the money may fall into the estate and be shared under the will or intestacy rules.

The presumption can be rebutted by evidence, on a balance of probabilities, that the transferor intended a gift. The focus is on the intention at the time of the transfer.

There is an exception for minors. For a gratuitous transfer from a parent to a minor child, the starting point is the presumption of advancement, which means a gift, not a resulting trust. Transfers between spouses follow different rules, so get advice if that is your situation.

Evidence courts weigh

Courts consider the surrounding circumstances rather than relying on one document. Evidence can include:

• Later statements of intention by the parent
• The wording of the bank documents
• Who controlled and used the funds
• Any power of attorney in place
• How the account was treated for tax

A child who used the account only to pay the parent's bills may be viewed very differently from a child who drew on it for personal use, though each case depends on all the evidence.

Other situations to keep in mind

The dependant support rule applies only to that kind of claim, not to ordinary distribution of the estate. A dependant is a spouse, parent, child or sibling the deceased was supporting, and this can include a common-law partner. The application must generally be made within six months after the grant of probate or administration. However, the court may allow a dependant's support application at any time as to any part of the estate not yet distributed.

What to do next

• Collect the account opening documents, statements and any signature cards
• Note who deposited money, who withdrew it and for what purpose
• Gather any notes, emails or messages in which the deceased explained their intentions
• Check for a power of attorney and who used it
• If it is unclear who owns the funds, consider getting advice before distributing them

If you are a beneficiary and you are not sure what the estate holds, a person with a financial interest in the estate can move for orders such as requiring the estate trustee to file a statement of estate assets, give further particulars or pass accounts. Timing matters too: the basic limitation period is two years from the day the claim was discovered, and how that applies to a joint account claim depends on the facts. A lawyer can confirm the deadline in your case.

Frequently asked questions