Many people are surprised to learn that joint accounts or property held with an adult child do not always pass automatically to that child. In Ontario, these assets may instead fall back into the estate unless there is clear evidence of a gift, which can create confusion and conflict among family members. Our latest bulletin explains how courts determine intention, why proper documentation matters, and how this can impact your estate plan. Understanding these rules is essential for anyone who wants to avoid disputes and ensure smooth estate administration.
A common issue that surprises clients during estate administration is discovering that, in Ontario, jointly held property with a non-spouse may not automatically pass to the surviving joint owner. Instead, it may fall into the residue of the estate. This outcome often contradicts what families expect and can lead to confusion, conflict, and litigation.
In Ontario, when a deceased person holds real or personal property jointly with a non-spouse, most commonly an adult child, the law presumes a resulting trust. This means the surviving joint owner is presumed to hold the property in trust for the estate unless they can prove the deceased intended to make a gift. The presumption reflects the reality that many joint arrangements are created for convenience, not as estate planning tools.
Understanding this presumption, and how to rebut it, is essential for anyone planning their estate or administering one.
Why the Law Presumes a Resulting Trust
The leading case, Pecore v. Pecore, establishes that gratuitous transfers to adult children are presumed to be held on resulting trust. Parents often add children to accounts to help with day-to-day management rather than intending to gift the balance of the account funds to the surviving account holder on death.
Consider the following scenario:
You have just turned 80. You are retired and spending most of your time with your grandchildren. You still have regular expenses and income from your pension, Old Age Security, and Canada Pension Plan, but you would rather not deal with the administrative burden of daily banking. You add your daughter, Sally, as a joint holder on your chequing account. After all, she has a business degree and has always been savvy with numbers.
But what was your intention in adding her as joint account holder? Did you add Sally because you wanted her to inherit the account on your death? Or did you simply want her to help manage your finances as you age?
The law assumes the latter unless there is clear evidence to the contrary.
How Resulting Trust Disputes Arise
These disputes often surface in families with multiple children who do not get along with each other. Imagine a mother who holds a $100,000 account jointly with Child A. When she dies:
- Child A insists the account passes to them by right of survivorship.
- Child B and Child C argue the account is an estate asset to be divided equally.
When the stakes are high and relationships are strained, so is the likelihood of conflict. Without clear evidence of intention, families can find themselves in costly and emotionally draining litigation.
Rebutting the Presumption: Proving a Gift Was Intended
The presumption of a resulting trust is rebuttable. The surviving joint owner can prove the deceased intended a gift by providing evidence of intention at the time the joint ownership was created.
Evidence may include:
- clear statements of intention;
- contemporaneous estate planning documents;
- consistent behavior by the deceased;
- financial records showing the deceased treated the asset as belonging to the joint owner; or,
- written instructions to advisors.
Returning to our example, perhaps you want Sally to manage your finances and inherit the account. You add her as a joint holder with right of survivorship, but you do not stop there. You meet with your estates lawyer and update your will to include a clause such as:
“I own a bank account at ABC Bank jointly with my daughter, SALLY. I intend for SALLY to be the sole legal and beneficial owner of that property by right of survivorship.”
This level of clarity reduces the risk of disputes and best ensures that your intentions are honoured.
When Joint Ownership Is Not Contested
Not every joint property situation leads to conflict. In some estates, the joint account holder acknowledges that the deceased did not intend to exclude the asset from the estate and that it should be shared equally among the estate’s beneficiaries. However, as discussed above, relying on a surviving joint owner to voluntarily treat the asset as part of the estate may create uncertainty and potential conflict.
Do Resulting Trusts Apply to Registered Accounts?
Clients often ask whether resulting trust principles apply to RRSPs, RRIFs, TFSAs, or other registered accounts with designated beneficiaries.
The Ontario decision in Kunka Estate v. Giasson (2026) provides helpful guidance.
The case involved a deceased individual who transferred assets, including registered accounts, to certain beneficiaries. The question was whether these assets should remain outside the estate or be treated as an estate asset by consequence of a resulting trust.
The court confirmed two key points:
- A resulting trust can arise when assets are transferred without an intention to gift, especially to adult children.
- Registered accounts with valid beneficiary designations generally pass outside the estate, unless there is compelling evidence of contrary intention, incapacity, or undue influence.
In other words, while beneficiary designations are generally effective to pass registered assets outside of the estate, courts may still examine the surrounding circumstances to determine whether the designation reflects the transferor’s true intention.
Conclusion
Joint ownership can be a useful tool for managing finances, but it carries legal consequences that many people do not fully appreciate. In Ontario, joint property with a non-spouse is presumed to form part of the estate unless there is clear evidence of a gift. Proper planning, especially clear documentation of intention, is the best way to avoid disputes and ensure your estate is administered according to your wishes.