As parents grow older, it is not uncommon for them to choose to add one or more of their children as joint owners on an asset, such as a bank account. In some situations, it might be the parent’s intention to retain control over the funds in a joint account, while having the ability to engage the help of their children should they run into problems. In other cases, joint accounts may be intended to be treated just as the name suggests, with the account funds accessible to both parties.

However, if these intentions are not clear, it is possible that confusion and disputes may ensue upon the death of a parent resulting in estate litigation between the child and other interested parties. The Alberta Court recently addressed a similar situation in which a daughter claimed that she was entitled to the funds which were contained in a joint account held by her and her deceased mother.

Daughter claims she is entitled to $50,000 in joint account following mother’s death

In the matter of Harder Estate (Re), the deceased was the mother of the applicant, “DH,” and the respondent “LP.” At the time of her death, both the mother and LP were named jointly on a bank account held at Bank of Montreal (the “bank”) that contained approximately $50,000 at the date of the hearing.

LP argued that when her mother set up the account, she expressly stated that LP was to receive any remaining funds in the account upon her death. If LP deceased her, the remaining funds were otherwise to be used for charitable and educational purposes of the mother. LP also asserted that if the Court did not agree that these were the deceased’s intentions, in the alternative, she should be the legal and beneficial owner of the funds by right of survivorship.

Son argues account funds should form part of estate

Conversely, DH claimed that LP was only added as a joint owner on the account because their mother needed the daughter’s assistance with managing her banking and it was not the deceased’s intention for LP to benefit from the account funds following her death. Instead, DH sought to have the remaining account funds form part of the mother’s estate, which, per the will, would be equally divided between DH and LP.

However, DH admitted that he did not have evidence to support his position that the account was never intended to directly benefit LP. Moreover, LP did not provide any evidence aside from what she claimed her mother told her, and stated that:

“Mother told me she wanted me to make sure her great-grandchildren had [the] opportunity to have Christian education.  And she also wanted me to continue to give money to her church charities.”

Daughter bears burden of proof under principles of resulting trust

The Court began by noting that if it agreed with LP’s claim of a resulting trust, she would be the rightful owner of the remaining funds. Referring to the 2007 Supreme Court of Canada decision in Pecore v. Pecore, the Court highlighted that when there is a gratuitous transfer of money for which no consideration is provided, the onus is on the transferee to demonstrate a gift was intended.

Applying this principle to the case at hand, this required LP to establish that it was her mother’s intention for the funds to pass to her. However, the Court found that she did not provide evidence of her mother’s intentions. Without this evidence, the Court instead presumed that the money was not gifted or otherwise transferred to LP. Once it was determined that there was no resulting trust, the Court then considered whether LP was entitled to ownership of the account under the right of survivorship.

Survivorship rights acquired through banking documents are insufficient on their own

The account was described by the bank as being “joint with right of survivorship” as the deceased did not opt out of survivorship on the form when the account was created. However, courts have previously made the distinction between legal and beneficial ownership of accounts.

The Supreme Court of Canada has previously held that joint bank accounts require something beyond a mere existence of survivorship rights acquired through banking documents. Therefore, while LP may have the legal right to the account itself, something more was required to establish that the mother also wanted LP to be the sole recipient of money held in the account.

The Court explained that:

“The mother did not provide any other species of evidence bearing on whether the beneficial interest moved to her, staking her entire position on the mere existence of a survivorship right i.e. without showing how extensive that right was.

Overall, the daughter provided no evidence showing or signaling that her mother intended her to receive the beneficial stake in the monies at the end, leaving her with legal ownership only.”

Court orders funds to be transferred to the estate

The Court went on to note that while LP may have received legal ownership of the account, allowing her to withdraw monies and engage with the bank herself, however, this was different from her being “entitled to treat them as her own.”

Given the lack of evidence provided by LP, which left the Court with a great deal of uncertainty, the Court found that the account balance was to be transferred to the estate and subsequently distributed according to the mother’s will.

Contact the Estate Litigation Lawyers at DBH Law in Calgary For Trustworthy Representation in Estate Disputes

Estate planning and estate disputes can be very complex and emotional areas of law, particularly as they often involve several family members. If you are involved in an estate dispute, such as a dispute over a willpower of attorney, trust, or have questions about an estate planning tool, contact the experienced estate litigation team at DBH Law to see how we can help you. To schedule a confidential consultation with one of our team members, contact us online or call us at 403.252.9937.