Joint Bank Accounts and Probate in Ontario: Does the Survivor Keep It?

You have lost someone, and your name was on their bank account. You may be wondering whether that money is yours now, or whether it has to be listed as part of the estate and tied up in probate.

The answer often depends on why the account was joint in the first place. This article explains the general rule, the presumption that can pull a joint account back into an estate, and what to gather if the question comes up.

The general idea: survivorship versus the estate

Many joint accounts are set up so that, when one owner dies, the other owner automatically takes the money. This is called a right of survivorship. Assets held jointly that automatically become the property of the other owner or owners on death are not included in the estate value used to calculate Estate Administration Tax.

By contrast, the tax is based on the value of all assets the deceased owned at the time of death, including bank accounts held in their own name, investments and property held in another person's name. So the question is whether the money in a joint account really belonged to the survivor by survivorship, or whether it is treated as still belonging to the person who died.

The presumption that can bring the money back in

When a parent puts money into a joint account with an adult child without receiving payment (a gratuitous transfer), the law presumes the child holds that money in trust for the parent's estate. This is called a resulting trust.

The presumption is not final. It can be rebutted by evidence, on a balance of probabilities, that the parent intended the child to have the right of survivorship. In plain words, the survivor has to show it is more likely than not that the parent meant the child to keep what was left.

There is an exception for minor children. For gratuitous transfers from a parent to a minor child, the starting point is instead a presumption of advancement, meaning the transfer is presumed to be a gift.

These rules come from court decisions rather than a single statute. Accounts between spouses, or accounts that are not between a parent and a child, can raise different considerations, so a lawyer can confirm how they apply to your facts.

Why it matters for probate and tax

If the presumption is not rebutted, the money may be treated as belonging to the estate rather than to the survivor. That can affect who is entitled to it and how it is reported when the estate trustee applies for a certificate.

Where an estate certificate is needed, the Estate Administration Tax is paid as a deposit when the application is filed with the Superior Court of Justice, and the estate pays it, not the estate trustee personally. There is no tax on the first $50,000 of the estate's value, and above that the tax is $15 for every $1,000 or part of $1,000. A $500,000 estate, for example, would pay $6,750.

The estate trustee also has reporting duties. An Estate Information Return must be filed with the Ministry of Finance within 180 calendar days after the certificate is issued, listing each asset and its value on the date of death. If new assets are found or the return was wrong, an amended return is due within 60 days of becoming aware. A joint account that later turns out to belong to the estate is the kind of discovery that can trigger that duty.

Evidence that can matter

Because the presumption can be rebutted by evidence, documents and accounts of what was said can become important. The following kinds of material are commonly relevant:

• The bank's account-opening forms and any survivorship wording on them.
• Who deposited money and who actually used the account during the person's life.
• Notes, emails or letters showing what the account holder intended.
• Whether the account paid bills for the person who died or was used for the child's own purposes.
• Whether the person who died also made a will, and what it says about the account.

No single item decides the matter. A court looks at the overall picture of what the person intended when the account was opened or the money was added.

What to do next

• Get a copy of the death certificate and tell the bank, but do not move or spend large sums until you understand who is entitled to them.
• Collect account statements and the bank's account-opening documents for the joint account.
• Write down, while memories are fresh, why the account was made joint and who used it.
• Keep records of any withdrawals you make after the death.
• Tell the estate trustee about the account so it is dealt with correctly in any filings.
• Speak with a lawyer if other family members dispute the account, or if the estate's value is close to a tax threshold.

If beneficiaries or other family members disagree about the account, it is worth getting advice early. A lawyer can explain how the presumption may apply to your situation.

Frequently asked questions