When more than one person is a named owner of an asset, arguments can arise, both before and after death as to who is the real owner. Such is the occupation of Will and Estate Lawyers, aka Estate Litigation Lawyers.
In the area of Wills, Estates and Trusts not to mention Estate litigation, there is an extremely important doctrine of law called the presumption of resulting trust. We have commented upon that in a number of other blogs. Just use the search function on our Web Site and enter presumption of resulting trust. While the legal concept appears to be complicated, it is relatively simple and can be distilled down to two common sentiments. “Follow the money” and “what were the parties’ intentions”. Otherwise described as , who paid for the asset and why is the asset owned on paper this way?
The presumption of resulting trust may apply when a person is added either with a right of survivorship or simply as a joint owner to an asset. A common example would be when an elderly parent adds an adult child as a joint owner to their bank account. Did the parent intend upon their death that the adult child receive all of the money in the account or was the adult child simply added as a convenience and the beneficial owner remained even after death the parent, and therefore the disposition of that asset would be governed by the parent’s Will.
The 2024 decision of the Ontario Court of Appeal in Falsetto v. Falsetto is an interesting exploration of this area.
It involves the Planning Act, the doctrine of merger not being two faced, a divorce and a number of other areas of law falling one on top of the other. It is a common aspect of estate litigation, or the work of a Wills and Estates Lawyer that it is a melting pot of many areas of law, one being added on top of the other and requires an open mind on the part of the estate litigation attorney to keep in mind.
Our own Justin Bieber has a hit single called “Intentions”, linked here I am looking for the link to that video that I found on line, either Viveo or YouTube. Part of the lyrics of the song are “heartful of equity or an asset, make sure that you don’t need no mentions, yeah these are my only intentions”. I doubt Justin Bieber was commenting on the doctrine of presumption of resulting trust, but it is a curious coincidence that it highlights what two of a three judge panel of the Ontario Court of Appeals held. Namely that the overarching factor in deciding whether or not the presumption holds, is what was the intention when the trust was created. In the example set out above, what did the parent intend when they added the adult child to their account. When such a factual presumption arises, the onus is on the other, and in this example the adult child, to disprove the presumption. In other words to prove the intention of making a gift. “Heartful of equity or an asset”, the presumption of resulting trust is a doctrine of equity, in other words the fairness rules that the court applies. Did Bieber go to law school?
The Court of Appeal, which here was a panel of three judges was not unanimous although the majority came to the conclusion that intention was overriding all other factors, but Justice MacPherson dissented and found that the application judge was impeccably correct in that the Planning Act factors were enough to fill in the holes in determining intention. Justice MacPherson quoted two decisions Zacker v. Zacker and Styres v. Martin to support the conclusion that a party cannot achieve one result for the purpose of avoiding a legal consequence prescribed by statute – in this case the Planning Act – and achieve an opposite result for other purposes. Remember this dissent. The application judge lost out in the end, but this is an important legal concept to keep tucked away for future use.