Joint Bank Accounts at Death: What the Executor Must Know

A joint bank account looks simple: two names on the account, so the survivor keeps the money. In estates, the question is often harder. A parent may have added an adult child only for convenience, to help pay bills, and other children may expect the money to be shared under the will.

This article explains the basic idea of survivorship, how the Supreme Court of Canada approached the presumption of resulting trust, and what an executor should do when the account's ownership is unclear. Because these disputes turn on the facts, legal advice is often worthwhile.

Survivorship and why it matters to the estate

Right of survivorship is the idea that a surviving joint owner may take an asset directly, instead of it passing under the will. Whether that applies to a particular account depends on the facts, so it is worth confirming with a lawyer.

An executor needs to know who really owns an account, because that affects what the estate has to deal with. How this applies depends on your situation, so it is worth confirming with a lawyer. The estate trustee's job is to collect the deceased's assets, pay debts and distribute the residue.

The same idea applies to land. Real property that does not pass by right of survivorship generally needs probate. So both bank accounts and real estate raise the question of whether the asset belongs to the survivor or to the estate.

The label on the account is not always the end of the question. When the dispute is about what the deceased actually intended, the court looks at the evidence.

The presumption of resulting trust

In Pecore v. Pecore, 2007 SCC 17, the Supreme Court of Canada said the presumption of resulting trust is the general rule for gratuitous transfers. That means the person receiving the transfer must show a gift was intended.

The test for rebutting the presumption is the transferor's contrary intention, on a balance of probabilities, judged at the time of the transfer. What the deceased intended when the account was opened or changed is what matters, not what people wish had been intended later.

For an adult child on a parent's joint account, the presumption of resulting trust applies, and the surviving child must prove the parent intended to give the right of survivorship. What that means for a particular account depends on the evidence, so it is worth confirming with a lawyer.

Evidence that tends to matter

Since intent is the heart of the question, executors and survivors should collect documents early. What counts as strong or weak evidence depends on the facts, and a lawyer can assess it.

Keep records safe. Estate representatives must keep the records supporting the Estate Information Return for four years.

Estate tax and reporting

Estate Administration Tax is charged on the value of the estate as of the date of death. The return must report the total value of real property and personal property owned by the deceased at death. Whether a joint account counts toward that value depends on whether it was truly the deceased's property, which is the same ownership question described above.

For estates where the certificate application was made on or after January 1, 2020, there is no tax if the estate is worth $50,000 or less. Above that, the tax is $15 for every $1,000, or part, of estate value. The initial Estate Information Return is due within 180 calendar days after the certificate is issued.

Getting the value wrong has consequences. The Ministry may assess or reassess within four years after the tax was due, with no time limit where a filing was missed or a misrepresentation was made. False or misleading statements on the return can bring a fine of at least $1,000 and up to twice the tax payable, up to two years' imprisonment, or both. If you are unsure whether an account belongs on the return, get advice before filing.

What to do next

• List every account and note whether it is held jointly and with whom.
• Inform the banks of the death.
• Collect account opening records and several years of statements.
• Ask the survivor, in writing, why and when the account was set up.
• Do not distribute money that may belong to the estate until ownership is settled.
• Speak with an estates lawyer if relatives disagree or the account holds a large share of the estate.

Frequently asked questions