Your elderly parent put your name on her bank account. Did she do that so you could help with her banking? Or so that you would get the money after she died?
This is a difficult issue that comes up in estate litigation. In an effort to provide some clarity for families, the Supreme Court of Canada created a presumption of resulting trust.
What does this mean?
As parents get older they will sometimes add their adult child's name to their bank accounts. The bank account becomes a joint account. Both the
parent and adult child will legally have access to the money in that account. Joint accounts have survivorship rights, meaning that when the parent dies, the adult child now owns the money in that account. As such, the money does not form part of the parent's estate and will not be distributed under the Will.
However, the Supreme Court said there is a presumption of resulting trust. It is presumed that the parent did not intend to give the money to the child. It is presumed that the parent meant for the money to go to their estate and be distributed in accordance with their Will.
The adult child does however have the opportunity to rebut the presumption. The adult child has the chance to show proof that their parent intended to gift the money to them. If they can prove that on a balance of probabilities, they will get to keep the money.
The court will usually look at the circumstances around how the account was set up and the addition of the child's name, the source of the funds in the account, the use of the account funds, deposits and payment of income tax. The relationships in the family and correspondence between the family members would also be relevant evidence.
Comments
Post a Comment