Supreme Court Rules on Joint Accounts PART2

Pecore v. Pecore (2007 SCC 17) A father placed approximately $1 million of his assets in joint accounts with his daughter. She was one of several children. In his Will the father left the residue of his estate to his daughter and her husband equally. The father died and his daughter and son-in-law later divorced. The ex-husband challenged the daughter’s right to the survivorship interest in the balance in the joint account. Madsen Estate v. Saylor (2007 SCC 18) Again, a father placed approximately $160,000 of his assets in a joint account with one of his daughters. In his Will the daughter and her two siblings were to share 50% of his estate. The action was commenced by the siblings against the daughter in her capacity as the executor as she did not include the joint accounts in the distribution of the estate. There were a number of similarities in both cases including:  The father had control and use of the assets in the joint accounts during his lifetime  The father continued to pay all the taxes on the income earned in the joint accounts  The father had also given power of attorney to the same child whose name is on the joint accounts. However, after considering all the evidence, the Supreme Court of Canada reached different conclusions as to the intention of the parent in each case. In Pecore, the Supreme Court found that the father had indeed intended to gift survivorship rights to his daughter whereas in Saylor the Supreme Court found that there was no intention to gift the survivorship rights. The majority of the Supreme Court applied the following principles in both cases in reaching its conclusion: 1. Where a joint account is set up with an adult child and funded gratuitously by a parent, the presumption of resulting trust applies and the onus is on the child claiming the survivorship interest in the account to rebut the presumption by showing the parent intended to gift that interest to the child. If the evidence is not sufficient to rebut the presumption on a balance of probabilities, the joint account will be considered as part of the parent’s estate to be distributed according to the parent’s Will. 2. The Court will consider the evidence establishing the intention of the parent at the time of the transfer including: a) Evidence subsequent to the transfer relevant to the intention of the transferor at the time of the transfer.