Overview

Joint tenancy involves ownership of property by two or more persons with equal rights to the entire property. Upon the death of one joint tenant, the property automatically transfers to the surviving joint tenant(s), not the deceased’s estate. This is known as the right of survivorship, which contrasts with tenancy in common where the deceased’s share becomes part of their estate.

Intent and Assets in Joint Names

When a parent registers assets jointly with an adult child or places assets in a joint bank account, the key question is whether the parent intended for the assets to pass directly to the child upon death or for the child to hold the assets in trust for the parent's estate, to be distributed according to the will.

Joint Tenancy Rebuttable Presumptions

There are two primary rebuttable presumptions (assumptions by a court treated as fact unless contested and proven otherwise) in these cases:

1. Presumption of Resulting Trust: The legal title holder (the adult child) holds the property in trust for the benefit of the entire estate.
2. Presumption of Advancement: The property transferred from parent to child is considered a gift to that person in its entirety.

These principles were established in the 2007 Supreme Court of Canada decisions in Pecore v. Pecore and Madsen Estate v. Saylor:

Presumption of Advancement

• Applies equally to fathers and mothers.
• Limited to transfers between parents and their minor children, not applicable to adult children, including dependent adults.

Presumption of Resulting Trust

• general rule for gratuitous transfers (transfers without consideration).
• The burden of proof is on the transferee (adult child) to demonstrate that a gift was intended.

Challenging Presumptions

Either presumption can be contested with evidence showing that the parent had a different intention. Relevant evidence includes:

• Written documents.
• Contribution to the initial purchase or funding.
• Maintenance of the asset.
• Bank account documentation.
• Control and use of the funds or asset.
• Granting of a power of attorney.
• Tax treatment of interest from a joint bank account.

Ensuring Intentions of Joint Tenancy

For adult children holding joint assets or bank accounts with a parent:

• The right of survivorship does not guarantee entitlement to the asset or funds upon the parent's death. Proof may be required to show the parent's intent for the property to be a gift.

For parents considering joint tenancy with adult children:

• Clearly determine whether the intent is to gift the property to the child or to have the child hold it in trust for the estate.
• If it is a gift, ensure intent is clear, such as through a signed deed of gift.
• If it is a trust, outline the terms of the trust and have the adult child acknowledge them in writing.