Adult Child Added to Parent's Property: Gift or Trust in Ontario?

A parent dies, and it turns out the house or a bank account was in joint names with one child. That child says it was a gift and the property is theirs. The siblings say it was only for convenience and belongs in the estate to be shared. This is one of the most common sources of family estate disputes.

This article explains how Ontario courts approach the question, who must prove what, and what steps protect your position. It is general information only. The result always depends on the evidence about what the parent intended.

The starting point: a presumption of resulting trust

When a parent gratuitously transfers property, including into joint names, to an adult child, the law presumes the child holds it on resulting trust for the parent, and so for the parent's estate. Gratuitously means the child did not pay for it. A resulting trust means the child holds the property for someone else rather than owning it outright.

The child bears the burden of rebutting that presumption. This surprises many people. The child who survives and holds title is not automatically the owner. They must show the parent really meant them to have it.

What the court looks at

The question is the parent's actual intention at the time of the transfer. A court may also consider relevant evidence of the transferor's conduct after the transfer. Evidence can come from many places, so it helps to collect what exists.

• Who paid the taxes, insurance, repairs and bills after the transfer.
• Who reported the income, or used the account in practice.
• What the parent told the lawyer, bank or family when the change was made.
• Whether the parent kept control of the property and the money.
• Any documents signed at the time, and emails or notes from around that date.

These are examples of the kind of evidence people gather, and which ones carry weight depends on the case.

Rebutting the presumption does not always end the matter

Even a child who defeats the presumption may not keep the money outright. In Sawdon, the presumption was rebutted, but the sons were found to hold the joint-account funds under an obligation to share them equally among all five children. A court may therefore find that the parent meant the survivor to hold the funds for a purpose, not as a personal gift.

This is why the details of the parent's intention matter so much. A short written record from the time of the change can make a large difference to what a court concludes.

Different rules for spouses, and other side issues

Spouses are treated differently in one respect. Under Family Law Act s. 14, the presumption of resulting trust applies between spouses as if they were not married, but property held by spouses as joint tenants is proof, absent contrary evidence, that they intended to own it jointly, and money on deposit in both spouses' names is deemed held as joint tenants.

There are other angles. For a dependant support claim under the Succession Law Reform Act, money in a joint account that passes to the survivor, and property held as joint tenants, are treated as a testamentary disposition at the date of death. They count in the net estate only to the extent the funds or consideration came from the deceased, and the dependant must prove that.

A child who looked after a parent may instead argue unjust enrichment. They must prove an enrichment, a corresponding deprivation and the absence of any juristic reason for the enrichment. For services, a monetary award calculated on a quantum meruit (fee-for-service) basis is the default remedy and should usually be enough, while a constructive trust is exceptional.

Protecting the property and next steps

If you are worried the house will be sold before the dispute is decided, ask a lawyer about a certificate of pending litigation. Under the Courts of Justice Act, starting a proceeding about an interest in land is not notice to non-parties until the court issues a certificate of pending litigation and it is registered. It can be registered under either the Land Titles Act or the Registry Act. The court may discharge it in certain cases, such as where the claimant is really claiming money, has no reasonable claim to the land interest, or does not move the case forward with reasonable diligence.

Time limits also matter. Most claims must be started within two years after discovery, and discovery is the earlier of when you actually knew or when a reasonable person in your position ought to have known. Some estate claims have different periods, so confirm yours early.

• Get the title and bank records showing when and how the names were changed.
• Write down what you know about the parent's reasons and who was present.
• Collect evidence of who paid costs and who used the property or account.
• Do not move, sell or spend the disputed property or funds without advice.
• Speak with a lawyer about a certificate of pending litigation and time limits.
• Consider whether the family could reach a fair arrangement before court.

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