Supreme Court Rules on Joint Accounts PART3

b) Wording of bank documents: The clearer the language used in the bank document to suggest the transferor’s intent regarding the beneficial interest in the account, the more weight the evidence will carry. c) Control and use of the funds in the account: Exclusive control and use of the account by the transferor may be of assistance in determining intention but is not determinative. d) Granting of Power of Attorney: The granting of a power of attorney may be of assistance in determining the intention of the parent, especially if the evidence suggests that the transferor appreciated the distinction between granting that power and gifting the right of survivorship. e) Tax treatment of joint accounts: Whether or not a transferor continues to pay taxes on the income earned in the joint account during his/her lifetime may assist in establishing intention, but such evidence is not determinative. It is up to the Court to determine the weight to be given each element of the evidence. It is of interest to note that the Supreme Court did raise the question of the potential capital gains tax payable when transferring assets to a joint account, but it declined to comment on the issue further. The Supreme Court stated that “these are matters for determination between the Canada Revenue Agency (CRA) and taxpayers in specific cases.” Conclusion: Where a parent gratuitously sets up a joint account with an adult child and there is a dispute as to the ownership of the survivorship interest after the death of the parent, the presumption of resulting trust applies and the onus is on the child to establish the parent intended to give the child the survivorship interest. The Court will consider evidence establishing the intention of the parent at the time of the transfer. The language of bank documents, evidence of use of the account and payment of taxes on the account may not be determinative of the issue. To avoid litigation among family members a parent wishing to set up a joint account with an adult child should consult a lawyer and follow the advice given about how to clearly document the intention with respect to survivorship rights.