Joint Accounts and Common Law Presumptions
Joint accounts are a common tool in estate planning. Where accounts are held by two individuals jointly, both hold an equal and undivided share. When one dies, their interest terminates, and the surviving joint owner is left with the entire account. This results in numerous benefits from an estate planning perspective. However, it often also results in numerous lawsuits. The latest issue of Law Times includes an article which considers the controversial subject of joint accounts.
In “Awaiting Certainty on Jointly Held Assets,” Christopher Guly considers the debate over how to adjudicate challenges to jointly held accounts. He examines two decisions of the Ontario Court of Appeal, Saylor v. Brooks and Pecore v. Pecore. Both were recently heard by the Supreme Court of Canada.
The facts in Saylor and Pecore are somewhat similar in that both involve challenges brought by beneficiaries to accounts that were jointly held between a Deceased and his daughter. In both cases, the beneficiaries argued that the Deceased did not intend for the surviving daughter to acquire the entire account and that the funds should be returned to the Deceased’s estate.
In considering the beneficiaries’ claims, the Court diverged from the historic reliance on presumptions. In the past, a transfer of money or property between strangers was presumed to be a loan, while a transfer between a father and his wife and/or children was a presumed gift. Of course, the presumptions only operated as starting points and were rebuttable.
In Saylor and Pecore, the Court ruled that it must first consider the totality of the evidence and determine the intention of the Deceased at the time the joint account was created. Only if intention cannot be clearly determined will the Court then turn to the presumptions.
Sounds simple? Well, as Guly points out by reference to discussions with practitioners, including Ian Hull, the decisions raise numerous concerns. Namely, what evidence do you use to prove intention? What if you do not have available evidence? How much evidence is necessary to avoid the presumption?
I will be interested in reading the Supreme Court’s answers to these difficult questions.
For more background information on legal issues surrounding joint accounts, check out Ian and Suzana’s previous blogs found in the "Joint Accounts" category on the blogpage.
Thanks for reading.
Jason
