When is an Owner of a Bank Account not an Owner?
The Supreme Court of Canada in the Precore decision confirmed the equitable rule (i.e. fairness law) called the presumption of resulting trust and applied it to jointly owned bank accounts. Frequently parents will add an adult child as a joint holder of a bank account. Generally this is done as banking convenience. As time passes, the child/parent relationship reverses and the child assumes the financial management of the parent’s affairs. However, by virtue of joint tenancy and the death of the parent, the surviving child becomes the sole owner of the bank account. But was that the intention of the now deceased parent? Looking at various factual indicators, the court confirmed that the answer was no. The child was only a convenience placeholder and the beneficial owner throughout was the parent That beneficial ownership continues after death and the bank account should now form part of the assets of the deceased parent’s estate. On a practical basis, our clients do not include these assets in their probate application, but agree with the beneficiaries of the estate that it is indeed an asset and is governed by the terms of the Will. So far so good, logical and fair. I would now refer you onto a further blog article about how logic falls off the edge of the table and becomes a shard of glass stuck in one’s leg. See our blog titled Palm Tree Justice Gone Wild.