The Ontario Court of Appeal decision in Foley v.
McIntyre1 is an interesting and helpful discussion
of the presumption of resulting trust in the context of joint
accounts held between parents and their adult children. The
presumption of resulting trust has been applied by the Courts to
negate the application of the right of survivorship in joint
tenancies by deeming adult children to be holding joint accounts in
trust for the parent. This is an important and often contentious
issue that must be considered by both individuals and estate
planners in developing and implementing an estate plan.
The appeal was made by Donald Foley ("Donald"),
following the dismissal of his action to set aside three inter
vivos monetary transfers and a testamentary bequest of Canada
Savings Bonds made by his father, Edward Foley
("Edward"), to his sister, Dorothy McIntyre
("Dorothy"). The Court of Appeal dismissed his appeal and
upheld the trial judge's holdings of the validity of the
monetary transfers and the bequest to the respondent.
With respect to the monetary transfers made by Edward during his
lifetime, the Court of Appeal found no reason to interfere with the
trial judge's findings that the transfers were valid, since:
(a) Edward did not lack capacity when the transfers were made, (b)
the presumption of resulting trust was rebutted in respect of the
gifts made by Edward to Dorothy because it was clear from the facts
that Edward's intention was to make a gift to Dorothy, and (c)
Edward was not unduly influenced by Dorothy.
The Court of Appeal then discussed the disposition of the Canada
Savings Bonds. The bonds were specifically bequeathed to Dorothy in
Edward's last Will and Testament but prior to his death, Edward
deposited the bonds into an account held by Edward, Donald and
Dorothy, as joint tenants with the right of survivorship.
Donald argued that (a) the specific gift of the bonds was
revoked when they were deposited into a joint account and (b) that
the trial judge erred in finding that the presumption of resulting
trust had not been rebutted. Dorothy submitted that Donald did not
provide sufficient evidence that the presumption of resulting trust
in respect of the joint account had been rebutted and further that
there was evidence confirming that the bonds could only be
deposited into the registered holder's account (and not the
Ultimately the Court of Appeal held that (a) Donald and Dorothy
held the joint account (which held the bonds) on resulting trust
for Edward, (b) the bonds had not matured at the time of his death,
and (c) the bonds remained registered "in Edward's name
only". Therefore, the Court of Appeal concluded that the bonds
passed to Dorothy pursuant to the specific bequest in Edward's
last Will and Testament and not based on the right of survivorship
applicable to the joint account.
This case reinforces the established legal framework of the
presumption of resulting trusts arising in circumstances of
gratuitous transfers from parents to their adult children. Further,
the Court of Appeal provide a clear rejection of the argument that
a transfer made purposefully to reduce/avoid probate fees is not
enough to rebut such presumption. Finally, this case serves as a
warning to individuals and estate planning professionals to ensure
that care is taken in structuring how assets are held and whether
deposits and other transfers during one's lifetime are
consistent with their ultimate testamentary intentions.
 Foley v McIntyre,  ONCA 382, 2015
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On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
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