Joint bank accounts are frequently the subject of estate litigation , the battle line being whether the joint account holder is to personally receive the funds by way of right of survivorship or whether the funds are not truly a joint asset but instead are held on a resulting trust and thus properly belong to the estate.
Kolic v Kolic 2019 BCSC 1463 reviews many of the leading cases on the presumption of resulting trust that can apply to joint bank accounts and found that the bank account was not gifted to the defendant by the deceased who contributed all the funds to the account , and since the rebuttable presumption of resulting trust was not rebutted , the bank account belonged to the estate.
Most of the assets in Kolic were comprised of joint bank accounts. The deceased was a simple woman with poor English reading and writing skills, was frugal, used only one bank account and was unsophisticated.
The court found that there was no evidence that the deceased intended to benefit the defendant anymore than she did in her will, and the bank accounts were found to properly be an estate asset based on a resulting trust.
The presumption where funds are held jointly by a testator with an adult child is there is a resulting trust in favour of the testator, and the onus of proof is on the adult child to prove that the bank account funds were intended as a gift .
In Pecore v Pecore 2007 SCC 17 at para 53 stated:
” The presumption of resulting trust means it will fall to the surviving joint account holder to prove that the transferor intended to gift the right of survivorship to whatever assets are left in the account to the survivor. Otherwise, the assets will be treated as part of the transferor’s estate to be distributed according to the transferor’s will.”
In Kolic the plaintiff had commenced a wills variation action that was adjourned pending a hearing on what actual assets formed part of the estate of the deceased.
The value of the estate as of the time of death of the deceased must be determined before a testator’s moral duty can be assessed for the purposes of a wills variation claim. Sim v Sim Estate 2016 BCSC 1222 at para. 74.
That assessment also includes consideration of inter vivos dispositions and assets passing by right of survivorship. Inch v Battie 2007 BCSC 1249.
Intention of the Transferor
Pecore stated that the process for determining the intention of the transfer or begins with determining the proper presumption to be applied and then weigh all the evidence relating to the actual intention of the transferor ( to determine whether the presumption of resulting trust has been rebutted).
The courts prefer evidence of intention to be contemporaneous or nearly so, but evidence of intention that arises subsequent to a transfer should not automatically be excluded , but must be relevant to the intention of the transferor at the time the transfer is made. The court must assess the reliability of the evidence and determine what weight it should be given , guarding against evidence that is self serving or tends to reflect a change in intention.
Control and Use of the Bank Account Funds
Evidence that the transferee controlled the funds does not necessarily mean that the transferee took a beneficial interest as aging parents may set up joint bank accounts for the sole purpose of having an adult child manage their funds for their own benefit.
Conversely the fact that a transferor controlled or used the funds during his or her life is not necessarily inconsistent with an intention at the time of the transfer that the transferee would acquire the balance of the account on the transferor’s death through the gift of right of survivorship.
In Bergen v Bergen 2013 BCCA 492 the court of appeal emphasized “ the actual intention of the grantor is the governing consideration.”
Thus the onus of proof was on the joint bank holder to establish that the funds she received, either jointly or in her sole name, were a gift from the deceased.
Unger v Unger 2017 BCSC 1946 followed Pecore and held that transfers to adult children, including joint assets with a right of survivorship give rise to the presumption of resulting trust , which places the burden on the adult child alleging that the transfer was a gift.
Where the Defendant alleges that the intent of the transfer or is to grant a right of survivorship only, the gift is not the specific amount in the bank account as of the time of the transfer, but rather whatever the account balance is at the time of death.
A bank document that simply marks that an account is to be joint or with a right of survivorship , even together with evidence that this was explained by a bank representative , does not necessarily rebut the presumption of resulting trust on its own.
In Slade Estate 2017 BCSC 2354 the court was critical that there was no supporting or additional evidence other than bank employees and lawyers told her that “a right of survivorship meant I would get the money in the account when she died”.
There was no specifics of who gave the advice and the advice was vague and there was no evidence of why a lawyer would be involved in setting up a bank account.
In Kyle Estate v Kyle 2017 BCCA 329 the appeal court upheld the trial court decision that the presumption of resulting trusts had not been rebutted, noting that the bank documents are not necessarily sufficient to rebut the presumption of resulting trust.
In Shkuratoff v Shkuratoff 2007 BCSC 1061 , purchasing a GIC solely with the deceased’s funds was sufficient to create a presumption of resulting trust. A signature card on the investment portfolio did not overcome the presumption because “ it was not sufficiently detailed to indicate the intention of the deceased upon her death”