I recently came across an interesting news article regarding a lucky lottery winner. On June 19, 2021, Frances Lloyd of Parksville B.C. was the winner of the Lotto 6/49 big jackpot, totalling $3,000,000.00.
Ms. Lloyd deposited her winnings into an existing bank account, jointly held with her daughter, Lisa. This account was previously set up to allow Lisa to assist her elderly mother with bill payments and incidental purchases. It appears unlikely that anyone ever planned for a sum in the millions to be deposited to this account.
From her winnings, Ms. Lloyd gave Lisa about $500,000.00 to assist her and her family with the financing of a new home. Ms. Lloyd also gave $500,000.00 to her son, Matthew.
Sadly, Ms. Lloyd only briefly enjoyed her new fortune as she passed away intestate in January 2022. Upon her mother’s death, Lisa pulled the entirety of the balance from the joint bank account and kept the funds for herself.
Ms. Lloyd’s two other children received none of the winnings, neither by way of gift from their mother while she was alive, nor from the funds held in the joint bank account. They are now plaintiffs in a lawsuit in which they claim half of the $3,000,000.00 lottery winnings.
Presumably the gifts to Lisa and Matthew are alleged to be advances of inheritance, with the balance of the proceeds in the joint account to be impressed with a resulting trust for the benefit of Ms. Lloyd’s estate.
It’s almost natural for many of us to have a joint bank account with our aging parents to help them navigate the often complicated world of electronic payments. But do we properly consider the implications? Can we assume that a mother intended that all her money go to one child, only because they were the one helping her with bill payments?
The Supreme Court of Canada decision in Pecore v. Pecore, 2007 SCC 17 is the leading authority on resulting trusts in the context of transfers between parents and their adult children. Justice Rothstein, for the majority, at para. 24, confirmed the presumption of resulting trust is the general rule for gratuitous transfers:
“The presumption of resulting trust is a rebuttable presumption of law and general rule that applies to gratuitous transfers. When a transfer is challenged, the presumption allocates the legal burden of proof. Thus, where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended… This is so because equity presumes bargains, not gifts.”
It is a prudent idea to ensure that any elderly parent properly expresses and gives effect to their intention regarding assets jointly held with an adult child. You never know – they may just win the lottery!
Click here to read Nick Esterbaur‘s earlier blog with further information regarding presumptions of resulting trust and beneficiary designations.
To find out more about the consequences of not preparing a Will, please read Suzana Popovic-Montag‘s blog post by clicking here.
Thank you for reading,