It’s not unusual for parents to have a jointly held bank account with an adult child. The question that arises upon the death of the parent, especially if there are other children of the deceased parent, is whose money is it?
The Supreme Court of Canada has ruled that when a parent makes a gratuitous transfer by depositing funds into a jointly-held bank account, there is no presumption of advancement. Simply put, the Court will not presume that the parent intended to benefit the child with the funds as an advancement on the child’s inheritance.
In fact, the opposite is true, there is now a presumption of resulting trust: The Courts will now presume that the surviving joint account was holding the funds in trust for the deceased and will distribute those funds according to the deceased’s Will unless the surviving joint account holder can prove that the deceased intended to gift the funds to the surviving account holder.
In Winstanley v. Winstanley, 2017 BCCA 265, a mother had a joint account with C, one of her two sons. The mother’s will contained a term leaving the residue of her estate to her other son, A. The Will also acknowledged that that assets she held jointly with C would not form part of her estate. An issue arose because C had transferred large sums of his mother’s money into their joint account before and after his mother’s death.
The Court of Appeal stated that a while parent is entitled to use or gift money in any way he or she sees fit, the correct legal analysis requires a judge to separately consider the circumstances of each and every deposit and transfer of funds into the joint account to determine whether it was authorized by the parent, and if so, what the parent’s intention was with respect to each deposit or transfer.