pecore v. pecore - Toronto Estate Law Blog

Joint Accounts: When a Sibling is the Surviving Account Holder

nonley@hullandhull.com (Hull & Hull LLP) — Thu, 17 Jul 2008 06:40:58 -0500

In a recent Ontario decision, Tiedemann v Tiedemann, the court considered whether the deceased had intended to gift to his sister the balance of funds in a joint account held by the both of them.

The sister argued that her brother intended to gift to her the balance of the funds as he did not have a good relationship with his son. The son of the deceased, the sole beneficiary of his estate, contented the funds belonged to the deceased’s estate on the basis of a resulting trust. The court found as the deceased was the only contributor to the account, the sister had to rebut the presumption of a resulting trust and as she was neither his spouse nor his child, she derived no benefit from the presumption of advancement.

Referencing the Supreme Court of Canada decisions of Pecore v. Pecore and Madsen Estate v. Saylor, the court looked at the evidence to determine the deceased’s actual intention. The court found the testimony by the deceased’s lawyer and a bank employee indicated that the deceased was interested in providing his sister with the authority to manage his finances and had not intended to gift her funds.

Weighing the evidence, the court found on a balance of probabilities that the resulting trust had not been rebutted and the intention of the deceased was to have his sister assist with bill payments if he became incapable.

To learn more about joint accounts, listen to Episode HOESP #60 where Ian Hull and Suzana Popovic-Montag discuss Percore v Pecore or read the transcribed version.

Thanks for reading,

Diane Vieira

Resulting Trusts - Don't Overlook Them

nonley@hullandhull.com (Hull & Hull LLP) — Wed, 27 Jun 2007 09:46:08 -0500

During my talk at Hull & Hull’s recent breakfast held at the Ontario Bar Association offices, I touched on the Pecore v. Pecore, 2007 SCC 17 (“Pecore”) and Madsen Estate v. Saylor, 2007 SCC 18 (“Madsen”) Supreme Court of Canada decisions which essentially did away with the presumption of advancement except as it pertains to minor children. In effect, a child of a deceased who holds assets jointly with the deceased can no longer rely on the presumption that the deceased wanted the child to take the asset at death.

Given that new law, executors not wanting to challenge rights of survivorship by asserting a resulting trust against the surviving account holder should obtain clear and comprehensive releases and indemnities from all beneficiaries. If possible, the beneficiaries should get independent legal advice. Where independent legal advice is feasible the beneficiaries should be encouraged to get it. In any case foregoing a resulting trust claim to joint assets has risks.

The circumstances or even the identities of gift-over beneficiaries can change so much over time that a release or indemnity may not be enforced by the court. New beneficiaries can be born who may be less generously inclined as their predecessors. Family relations can turn to the worst, changing the approach to joint assets.

All in all, a difficult recipe for Executors to be sure.

Thanks for reading.

Sean Graham

Resulting Trust Reverberations

nonley@hullandhull.com (Hull & Hull LLP) — Fri, 25 May 2007 22:03:46 -0500

Both of the recent Supreme Court of Canada joint account/resulting trust decisions of Pecore v. Pecore, [2007] SCC 17 and Madsen Estate v. Saylor, [2007] SCC 18 involved joint accounts between deceased and child.

It is worth considering whether the decisions will impact cases involving joint accounts between deceased and non-children. (And please note I'm not addressing the impact on situations involving children, which is considerable and needs much more analysis than a blog).

The SCC's strong statements confirming the presumption of resulting trust do not necessarily change the law as it pertains to non-children situations. However, the rarified source of the decisions could help Estate Trustees asserting resulting trusts over joint accounts with non-children. Consider:

The presumption of resulting trust therefore alters the general practice that a plaintiff (who would be the party challenging the transfer in these cases) bears the legal burden in a civil case. Rather, the onus is on the transferee to rebut the presumption of resulting trust. (Pecore, para 25)

Of course, the presumption of resulting trust means that 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. (Pecore, para 54)

Not really different from pre-existing caselaw, but the SCC rarely enters the realm of Estates and Trusts law. When it does, lawyers pay rapt and lasting attention. Even confirmation of pre-existing common law can have quite an effect.

No doubt every Estate Trustees claiming resulting trusts over joint accounts by a deceased with non-children will be referring to these cases.

Thanks for reading.

Sean Graham