Presumption of Resulting Trust and Joint Accounts: What Happens After a Parent’s Death?
The presumption of resulting trust and joint accounts is a critical legal concept in Canadian estate law, especially when adult children are added to their parents’ bank accounts. While joint accounts are often used for convenience and financial management, they don’t automatically entitle the surviving child to keep the funds after the parent’s death. Instead, the law presumes the money belongs to the deceased’s estate—unless proven otherwise. This article explores how this presumption works, what’s required to rebut it, and what recent court rulings have clarified about this issue.
Understanding the Presumption of Resulting Trust
When an adult child is added to a joint account with a parent, and the parent passes away, courts do not automatically assume that the child becomes the beneficial owner of the funds. Instead, a legal principle called the presumption of resulting trust applies.
Key Principles
- The adult child is presumed to be holding the funds in trust for the parent’s estate.
- This presumption can be rebutted—but only with sufficient evidence of the parent’s intent to gift the funds.
This principle was established in the landmark case Pecore v. Pecore, 2007 SCC 17, where the Supreme Court of Canada ruled that joint accounts between parents and adult children generally exist for convenience—not as gifts.
How to Rebut the Presumption
To prove the funds in a joint account were a gift and not part of the estate, the surviving child must rebut the presumption.
Required Evidence
- Contemporaneous evidence: Statements or documents from the parent at the time the account was made joint.
- Clear intent: Evidence that the parent wanted the child to own the funds for their own use after death.
- Consistency: Supporting facts that confirm gifting was the intention—such as a will or corroborating testimony.
Without this kind of proof, the law assumes the surviving child must return the funds to the estate for distribution to all beneficiaries.
Why Bank Forms Are Not Enough
Many assume that checking a box for “right of survivorship” on a bank form confirms the intention to gift. However, courts have routinely rejected this argument.
Legal Precedents
| Case | Ruling | Key Takeaway |
|---|---|---|
| Renwick Estate v. Stanberry (2023) | Bank forms alone were insufficient to prove intent. | Checking a box is not proof of gifting intent. |
| Gastle v. Gastle (2017) | Survivorship designation didn’t equal a gift. | Legal title ≠ beneficial ownership. |
| Calmusky v. Calmusky (2020) | Bank employee’s explanation not enough. | Intent must come from the parent—not the bank. |
| Turner v. Milne (2021) | Signature card insufficient to prove intent. | Need direct evidence of a gift. |
| Kolic v. Kolic (2019) | Explained bank forms failed to rebut presumption. | Survivorship ≠ gift without clear evidence. |
Best Practices for Joint Accounts with Parents
If you are setting up a joint account with a parent, or if you’re an adult child managing a parent’s finances, it’s important to ensure everything is clearly documented.
Steps to Avoid Confusion
- Document intent in writing: A signed letter or note from the parent explaining their intentions can be crucial.
- Include joint account plans in the will: Make sure joint accounts are referenced in the parent’s estate plan.
- Consult a lawyer: Legal advice during the setup can help ensure intentions are clearly communicated and legally recognized.
Frequently Asked Questions (FAQs)
1. Does right of survivorship mean I automatically get the money?
No. The presumption is that the money belongs to the estate unless you prove it was a gift.
2. Can bank documents prove my parent intended to gift me the funds?
Not alone. Courts require more than a checked box or signed form—they need clear evidence of intention.
3. What kind of evidence is needed to rebut the presumption?
Contemporaneous writings, verbal declarations, and other proof showing the parent’s intent to gift you the funds.
4. Are joint accounts ever safe from the presumption of resulting trust?
Only if there is clear, documented evidence that the parent intended to gift the funds outright.
5. What should I do if I’m setting up a joint account with a parent?
Have a written agreement, include details in the will, and consider seeking legal advice to avoid future disputes.
Conclusion
The presumption of resulting trust and joint accounts remains a powerful legal concept in Canadian estate law. While joint accounts may seem convenient, they can create unintended conflicts after a parent’s death. Without clear evidence of gifting intent, courts will assume the funds belong to the estate—not the surviving joint account holder. To avoid disputes and protect your loved ones, ensure all intentions are clearly documented and legally sound.
