Joint Bank Account With Right of Survivorship in Ontario

You may have shared an account with a parent, spouse or other family member, and now one holder has died. The question is whether the money is yours or belongs to the estate.

The answer depends on how the account was set up and why. This article explains the general rules in Ontario, the exceptions that can change the result, and what to expect from the bank.

The general rule for joint accounts

Federal guidance explains that many joint accounts include the right of survivorship, and the surviving holder becomes the account owner. In that case the money does not pass under the will, because property with a right of survivorship goes to the surviving owner rather than the estate trustee.

The Supreme Court of Canada has explained that survivorship rights in a joint account vest when the account is opened, so the gift is made during life. What is gifted is the survivor's interest in the balance at the time of death.

When the money may belong to the estate

Heirs may challenge the survivor, who may then need to show the deceased intended the funds as a gift. This comes up most often when a parent adds an adult child to an account. A leading 2007 Supreme Court of Canada decision says that, for gratuitous transfers, the presumption of resulting trust is the general rule. The person receiving the transfer must show a gift was intended, and an adult child added without payment is presumed to hold the funds in trust for the parent and, on death, for the estate.

There is an exception for minor children, where the presumption of a gift applies. Financial dependency of an adult child does not trigger it, though it can be strong evidence against the resulting trust.

Courts may look at several things to work out what the parent intended:

• 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 relevant to the intention at the time of the transfer

Spouses are treated differently

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

If the surviving spouse elects equalization of net family property, property received by survivorship is credited against the entitlement, unless a written instrument says the spouse receives it in addition. The election must be filed within six months after the first spouse's death. Unmarried partners cannot elect equalization.

Claims that can reach joint account money

For a dependant support claim, money deposited in an account in the deceased's name and another person's is deemed part of the net estate. Only the portion that belonged to the deceased immediately before the deposit is counted. The person making the claim must prove the funds belonged to the deceased, and a dependant who was the other party to the transaction must prove their own contribution.

A bank can still make payments unless a certified copy of a suspensory order has been personally served on it. This section also does not affect creditors' rights in any transaction where they have rights.

Estate administration tax can also be a concern. A joint asset that the survivor holds on resulting trust for the estate does not escape the tax, and bank accounts are included in the estate value. Jointly owned property that passes automatically to the other owner is not included.

What the bank will ask for and what to do next

The bank sets its own documentation requirements. Practices vary by institution, so call the bank to ask what it needs before you visit.

• Ask the bank what documents it needs to release the funds, and in what form.
• Collect the account opening documents and any later changes.
• Keep records of who deposited the money and who used it.
• Do not move or spend the funds until you know whether the estate or others may have a claim.
• Speak with a lawyer if family members disagree about the intention, or if you hold the account with a parent's money.

Frequently asked questions