Since the Supreme Court of Canada decisions of Pecore and Madsen Estate v. Saylor were released in 2007, the courts have seen an increase in challenges to jointly-owned assets and the "presumption of resulting trust" in estate disputes. Many cases involve houses or bank accounts in the joint names of an elderly parent and an adult child. When the parent dies, the question arises as to whether the asset belongs to the parent's estate, to be distributed according to the parent's last will, or passes to the adult child through the right of survivorship. This question is particularly pressing in British Columbia since assets passing by way of the right of survivorship are not affected by British Columbia's Wills Variation legislation.
In Pecore, the Supreme Court of Canada created a legal framework for how to determine when the presumption of resulting trust can be rebutted and thus the asset passes by right of survivorship. Where the claim relates to a joint bank account, the Court specifically identified modern "bank records", such as account opening documents, as being probative evidence of the parent's intention to make a gift. However, in the post-Pecore caselaw, courts have given relatively little weight to such documents. The recent decision of the B.C. Court of Appeal in Kyle Estate v. Kyle is a prime example.
The Kyle Estate decision concerned an account at a credit union in the joint names of Jack Kyle and his son Chris. The account was opened in 2011, and Jack subsequently deposited $400,000. The evidence at trial was that Jack attended at the credit union branch for about 20 minutes when the account was first opened. The account agreement contained a term relating to the right of survivorship. The trial judge, however, gave almost no weight to this document when determining whether Jack intended that Chris would receive the funds upon his death by right of survivorship, rather than the funds forming part of Jack's estate (to be distributed amongst his four sons). The account opening agreement did not refer to beneficial ownership of the funds in the account, and primarily concerned the ability of the surviving account holder to withdraw funds. The trial judge found that the agreement was not evidence that Jack understood the concept of a joint tenancy or that he intended to make a gift to Chris. The trial judge held that the presumption of resulting trust was not rebutted in the circumstances, and the funds did not pass to Chris by right of survivorship.
The B.C. Court of Appeal affirmed these findings, and made interesting comments about the evidentiary value of the credit union's account opening agreement. Saunders J.A. stated at para. 29:
"Nor do I consider the judge's failure to analyze the long form agreement an error that is either palpable or overriding. The judge concluded it was the short form agreement that was shown to Jack. In any case, neither agreement precluded a resulting trust. They appear to me to fill the primary function of clarifying the rights of the joint tenants on one part and the financial institution on the other, affirming the bank's obligation to allow withdrawal of the funds by a surviving joint tenant. They cannot be taken as conclusive evidence that as between the joint tenants there was no resulting trust, although without doubt they establish the joint account discussed in Pecore".
Accordingly, the Court of Appeal characterized the account agreement as delineating the rights of the credit union vis à vis the accountholders, rather than being evidence of the relationship between the joint account holders.
Due to Pecore, banks and other financial institutions will continue to see account opening agreements, and other bank records, being put forward as evidence of a gift, or being attacked by the party who is claiming a resulting trust. The Kyle Estate decision cautions that such agreements, as they relate to joint ownership and the right of survivorship, are given little evidentiary weight in relation to whether the presumption of resulting trust has been rebutted. The primary function of such agreements, as identified by the Court of Appeal, is to clarify how the bank may manage the account upon the death of one of the joint accountholders, not determine the issue of beneficial ownership.
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