Joint Investment Accounts and Survivorship: Who Gets the Money in Ontario?

You may have been named on a parent's or spouse's brokerage or investment account. When that person dies, you want to know whether the holdings are yours, whether they belong to the estate, and what the firm will need before it moves anything.

The answer depends on how the account was set up and what the owners intended. This article explains the general rules in Ontario and the points where disputes tend to arise.

Why the account type matters

Property that passes by survivorship goes directly to the surviving owner, not into the estate, and it does so despite what the will says. Many joint accounts include a right of survivorship, and the surviving holder then becomes the account owner.

Not every account with two names works this way. Some are set up so each owner holds a share that goes through their own estate instead. The account agreement is the starting point, so find the original application and any later changes.

Who is the money really for?

Survivorship on paper is not always the end of the story. Heirs may challenge the survivor, who may then need to show the deceased intended the funds as a gift.

In Pecore v. Pecore, 2007 SCC 17, the Supreme Court of Canada treated the presumption of resulting trust as the general rule for gratuitous transfers. The person receiving the transfer bears the onus of showing a gift was intended. An adult child added to a parent's account without paying is presumed to hold it in trust for the parent, and on death for the estate.

Courts may look at the wording of the bank documents, who controlled and used the funds, whether a power of attorney was granted, the tax treatment of the account, and later evidence that bears on the intention at the time of the transfer. The presumption of a gift is limited to minor children, and an adult child's financial dependency does not trigger it, though it can be strong evidence against a resulting trust.

Between spouses, money on deposit in both names is deemed held as joint tenants.

Common points of dispute

• One child was added to the account and the other children were not.
• The deceased added someone only for convenience, for example to pay bills.
• The survivor contributed none of the money.
• The account moved funds the deceased used to pay for their own care.
• A spouse claims support or equalization rights against the estate.

Claims that can still reach joint accounts

A dependant who says the deceased did not make adequate provision for their support can apply to the Superior Court of Justice for an order out of the estate. For this claim, money in an account in the deceased's name and another person's is deemed part of the net estate.

There is a limit. For joint deposits only the portion of the funds that belonged to the deceased immediately before the deposit is counted, and the person claiming must prove the funds belonged to the deceased. The deadline is generally six months after the certificate of appointment is granted, though the court may allow a late claim against property still undistributed.

If the estate is claiming the account, and the survivor holds it on resulting trust for the estate, it can also be counted in the estate value for estate administration tax.

What to do next

When opening or converting a joint account, you can ask the institution what happens if one holder dies and whether the survivor can access the funds. The institution sets its own documentation requirements. After a death, call the firm and ask what it needs from you.

• Locate the account application and any joint account agreement.
• Ask the firm in writing whether the account has a right of survivorship.
• Ask what documents it requires, such as proof of death; this varies by firm.
• Keep records showing who contributed funds and why the account was set up.
• Do not withdraw or transfer funds until you understand whether the estate may have a claim.
• Speak to a lawyer if siblings or other relatives dispute the account, and an accountant about tax.

On the tax side, the deceased is considered to have sold capital property just before death, and that applies even where the property passes by survivorship. An accountant can explain how that affects the final return.

Frequently asked questions