Joint GICs and the Presumption of Resulting Trust
Are joint GICs to be considered differently from other jointly held accounts when considering whether the proceeds of such accounts are subject to a presumption of resulting trust for the estate of the deceased account holder? Please read on.
In Pecore v. Pecore, the Supreme Court of Canada considered that, because it is common for elderly parents to hold accounts jointly with adult children for banking purposes, the starting presumption should be in favour of including the funds in the parent’s estate. The adult child will then have the onus of proving that the parent intended to gift the funds to him or her. The Court also addresses the evidence that may be used to defeat the presumption and prove that the parent intended to gift the funds in the account, including the following considerations: (i) whether the account documents show the parent’s intent, (ii) who controlled and used the funds prior to the parent’s death, (iii) whether the deceased parent had a power of attorney, and (iv) who paid the taxes on the account prior to the parent’s death. These considerations are fact-sensitive and that the trial judge is to consider the totality of the evidence and the weight to be placed on any particular factor.
In Videchak v. Giarratano, a 2009 decision of Justice Matheson of the Ontario Superior Court, his Honour, applying Pecore, found that a joint bank account used to pay debts was impressed with a resulting trust for the benefit of the deceased parent. In contrast, His Honour differentiated a jointly held GIC which was noted to be a savings vehicles and not for the payment of debts. In the absence of a characteristic associated with such daily banking, the Court was of the view that the identification of the GIC as joint with right of survivorship was sufficiently determinative of the deceased’s intention respecting that asset. As such, it passed to the joint account holders.
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