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Who Gets the Money in the Joint Bank Account?
In McLear v McLear Estate , an elderly mother and adult daughter opened a joint bank account with Mum's money. When Mum died, the daughter divided the money with her sisters, but left nothing to her brother. Since Mum put the daughter's name on the joint account, she felt the money belonged to her. The brother disagreed.
For the Court, the key factor was Mum's objective. Did placing the money into a joint account demonstrate Mum's intention to give her daughter the money? Since the deceased cannot testify, the courts start with some basic presumptions:
• NO ONE GIVES ANYTHING AWAY FREE -THE RESULTING TRUST: "A" deposits $1000 in an account that he holds jointly with "B". The court assumes that "A" intended that "B" hold that money in trust for A's estate because people normally make bargains not gifts. This is the Presumption of a Resulting Trust.
• FATHER'S GIFTS - THE PRESUMPTION OF ADVANCEMENT: In 1957, the Supreme Court of Canada enshrined the principle that fathers (not mothers) will make gifts to their children to fulfill their obligation of support. If a father deposited money into an account held jointly with his child, then the court presumes that the father intended to give a gift. This is the Presumption of Advancement.
CONCLUSION
The Court gave the brother his equal share of the money. In this case, the Court believed that the sister held the money received from the joint account in trust for her mother's estate. Without proof to the contrary, the court acted on the presumption of a Resulting Trust. This judge believed that the Presumption of Advancement was invalid when there were transfers of property by an ageing parent to an adult independent child. Advancement originated from an out of date practice where it was usual for gifts in this fashion to occur between fathers to sons. In today's day and age, this judge believed that the Presumption of Advancement would not apply to either mothers or fathers in situations where children were independent adults. There is now a role reversal where adult independent children, whose names are listed as joint account holders, are in reality holding the money in trust to help ageing parents manage their finances. These arrangements are not intended to be gifts. While the court recognized that parents might indeed want to make gifts in this fashion, it is up to the recipient to prove such an intention and he or she will not have the benefit of the Presumption of Advancement to prove their case.
There is an old joke that death is not the end... it is the beginning of estate litigation. Despite the temptation to jump to conclusions, it would be a mistake to view this canvassing of a significant legal issue as legal advice. It is always advisable to speak to a qualified lawyer to determine if circumstances are sufficient to a make a claim against the recipient of money received from a joint bank account.
McLear v . McLear Estate (2000) 33 ETR 272, [2000] OJ No. 2570 ( Ont. SC ).
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