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Joint Assets and Survivorship Depend On the Intention of The Donor

What Do JIntentoint assets Depend on?

It is the actual intention of the transferor of assets at the time that the transfer is made that is relevant to whether or not a joint asset will be considered a valid gift with the right of survivorship, or merely a resulting trust that gives rise to a rebuttable presumption that the assets belong to the estate.

There are many decisions that have discussed  this proposition, and most recently was the decision McEwan vs McEwan 2014 BCSC 916.

In that decision the deceased left  his entire estate to his only granddaughters when he died at age 99.  In the previous  blog,  I commented that the estate was varied to provide the sole child of the deceased with 50% of the estate .

The deceased however had in addition to leaving an estate, set up a joint bank account with his two grandchildren, with them being the intended survivors of the  proximally $330,000 account upon his death.  The evidence was that the deceased called  his investment advisor to come to the hospital where the deceased , after an hours discussion, instructed the investment advisor to  provide forms so that  he could transfer funds into the joint names of him and his granddaughters, so that when he died, the funds would go to his granddaughters and not through his estate.

At the time of trial the investment account had grown to approximately $504,000, and the grandchildren had paid the taxes on the income since the transfer in late 2006 .the court examine the circumstances of the execution of the change form  to allow the granddaughters to become joint account holders, and found that the fact that he did so, knowing from his personal experience the consequences, and came to the conclusion that the deceased intended the bank account to be a gift to his granddaughters.

Accordingly the court found that the granddaughters had rebutted the presumption of reach of of resulting trust.

 

The joint asset law

[58] Pecore v. Pecore, 2007 SCC 17, is the leading case on the treatment of joint accounts after the death of the transferor. The question is whether the transferor intended to make a gift, or whether the property transferred is held by the transferee on a resulting trust.

[59]     The presumption of resulting trust is a rebuttable presumption of law and a general rule that applies to gratuitous transfers. When a transfer is challenged, the presumption allocates the legal burden of proof. Thus, where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended. See Pecore, at para. 24. The presumption of a resulting trust means that it will fall to the surviving joint account holder(s) (in this case, Karlynne and Shannon) to prove that the transferor intended to make a gift of the right of survivorship, with respect to whatever assets are left in the account, to the survivor(s). Otherwise, the assets will be treated as part of the transferor’s estate to be distributed according to the transferor’s will: see Pecore, at para. 53.

[60]     It is the actual intention of the transferor at the time of the transfer that is relevant: see Pecore, at para. 5. All evidence relevant to the intent of the transferor at the time of the transfer, not excluded by a rule of evidence, is admissible: see Doucette v. Mclnnes, 2009 BCCA 393, at para. 56. This can include evidence subsequent to the transfer, control and use of funds in the account and the granting of a power of attorney. The court must weigh all of the evidence relating to the transferor’s actual intention to determine whether the presumption of resulting trust has been rebutted: see Pecore, at para. 55.

 

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