Are signature cards created at the time of opening joint bank accounts held by a parent and adult child sufficient to rebut the presumption of resulting trust?

The presumption of resulting trust and joint accounts

When an adult child holds a joint account with their parent, there is a presumption that when the parent dies, the money in the account at the time of their death does not pass to the adult child by right of survivorship but is held in resulting trust for the parent’s estate.

In Pecore v. Pecore, 2007 SCC 17 (CanLII), [2007] 1 SCR 795, the Supreme Court of Canada explained at paragraph 36:

[36] […] it is common nowadays for ageing parents to transfer their assets into joint accounts with their adult children in order to have that child assist them in managing their financial affairs.  There should therefore be a rebuttable presumption that the adult child is holding the property in trust for the ageing parent to facilitate the free and efficient management of that parent’s affairs.

Rebutting the presumption

To rebut the presumption of resulting trust, the surviving adult child will need to prove that the parent intended to gift them the right of survivorship to the monies left in the account at the time of their death. The onus is therefore on the adult child to present sufficient evidence on a balance of probabilities of the parent’s intention to make such a gift.  Such evidence should be as contemporaneous as possible with the time that the account was made joint.

How courts have treated this issue

In Renwick Estate and Miller v. Stanberry, 2023 ONSC 5970 (CanLII), the primary evidence of the adult child (the Respondent) seeking to rebut the presumption consisted of TD bank documentation signed at the bank branch (collectively, the “bank forms”), being:

1. signature cards created at the time that the disputed accounts were set up showing that the Deceased checked off a box indicating the accounts were to have a right of survivorship; and
2. the associated financial services agreements.

The court concluded that the bank forms were not sufficient to rebut the presumption because they did not show whether the parent gave “any real thought or attention to the contents of the cards and forms”.

Even if the parent understood that her adult child would receive the monies in the accounts upon her death, such bank forms do not sufficiently support the conclusion that she intended for her adult child to have beneficial ownership of the monies for her own use as opposed to the right to deal with them for the benefit of the estate beneficiaries.

The court held that the respondent failed to rebut the presumption and that the disputed accounts should be treated as estate assets. The court stated at paragraph 33:

[33] […] the key conclusion to be drawn from these cases is that a party seeking to rebut the presumption of resulting trust cannot rely on checking off a box, or other language in banking documents explaining survivorship. There must be more evidence than this, to establish that the individual creating the joint account truly turned their mind to gifting a beneficial interest in the account. Bank documents can speak to legal title, but they are not necessarily dispositive regarding equitable title of the accounts. In the present case, this type of further evidence just is not sufficiently present. Pamela can point to banking documents, but there is no direct evidence of what was actually discussed when the Disputed Accounts were set up.

In its reasons, the court also discussed other cases that examined this issue.

In GASTLE V. GASTLE –, 2017 ONSC 7797 (CanLII), which was similar on its facts to Renwick, the deceased parent had similarly checked off a box at a local TD Bank branch to indicate that a joint account with his son had a right of survivorship. The Court did not accept that as sufficient to rebut the presumption of resulting trust and stated:

[30] […] The fact that [the deceased] checked off the box to designate right of survivorship is simply proof that he understood that the accounts would not pass through the estate. This is not evidence that [the deceased] intended to gift the accounts to [his son].

In Calmusky v. Calmusky, 2020 ONSC 1506 (CanLII), the deceased signed similar signature cards. There was also evidence from the bank employee who made the accounts joint about what she typically would have told an elderly person in similar circumstances at the time of account opening. The court held that the explanation of the bank employee, together with the contents of the bank documents, were not sufficient to support that the deceased intended for his son to have beneficial ownership of the monies for his own use, as opposed to the right to deal with them for the benefit of the estate beneficiaries.

In Turner v. Milne, 2021 BCSC 1370 (CanLII), where a mother had added her daughter as a joint account holder, the court determined that a signature card indicating survivorship is not enough, and that some amount of further explanation provided on the accompanying bank documents would not change that.

In Kolic v. Kolic, 2019 BCSC 1463 (CanLII), the signature card stated that there was no right of survivorship unless a box was ticked, and that box was ticked. The bank employee who set up the joint account and witnessed the signatures on the card stated that it was his practice to explain the effect of a joint account, the fact that it could have a right of survivorship if desired, and the meaning of the right of survivorship. Again, this was not enough to rebut the presumption.

For more information, contact our Estate Litigation Lawyers and we would be happy to help.

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