Introduction
The doctrine of resulting trusts continues to shape the outcome of disputes over joint bank accounts between parents and adult children. While the Supreme Court of Canada in Pecore v. Pecore, 2007 SCC 17 established the presumption of resulting trust for gratuitous transfers, recent Ontario decisions have clarified the evidentiary threshold required to rebut this presumption. This article examines how, in practice, bank forms and signature cards are rarely sufficient to establish donative intent, and highlights key lessons from recent cases.
The Presumption of Resulting Trust: A Brief Overview
The presumption of resulting trust arises when property is transferred gratuitously, typically from a parent to an adult child. As stated in Pecore v. Pecore, “equity presumes bargains, not gifts”. The transferee bears the burden of rebutting this presumption by demonstrating, on a balance of probabilities, that the transferor intended a gift.
The Evidentiary Challenge: Why Bank Forms and Signature Cards May Fall Short
Recent jurisprudence confirms that standard bank documentation, such as forms indicating right of survivorship or signature cards, does not on its own establish the requisite intention to gift the funds. Courts have repeatedly found that these documents may merely reflect administrative arrangements, rather than evidence of donative intent.
Renwick Estate and Miller v. Stanberry, 2023 ONSC 5970
Facts: the deceased mother held joint accounts with one daughter totalling $128,241.41. The deceased held two other accounts held solely in her name, totalling $23,948.61. Most, but not all of the joint accounts had signature cards initialed by the deceased indicating the accounts were to be passed by survivorship. The deceased’s Will is silent on what is to be done with the funds in these accounts.
Issue: are the signature cards sufficient to rebut the presumption of resulting trust?
Finding: the signature cards are insufficient to rebut the presumption of resulting trust. The form indicating consent to the daughter’s right of survivorship does not indicate any intention that she be the sole recipient of these funds.
Result: the Joint Accounts are assets of the Estate.
Facts: the deceased had four children, one of whom was the Estate Trustee and controlled the finances of the deceased for the last seven years of her life. The Estate Trustee was a joint owner with the deceased of various real and financial assets and claimed the Estate owned nothing. It was ordered by the court that the joint assets belonged to the Estate, by way of resulting trust. The Estate Trustee was also ordered to disclose the assets in question. The Estate Trustee did not comply with the orders of the court. The Estate Trustee gave a poor accounting, with much unaccounted for and insufficient evidence provided in support of her expenditure claims. Included in her accounting is the claim that $205,000 was gifted to her by the deceased to purchase real estate.
Issue: were the missing funds a gift?
Finding: the missing funds, including those used to purchase real estate, were not valid gifts.
Result: all of the funds, with the exception of those claimed expenditures that the Judge deemed reasonable and credible, were owed to the Estate. This amount owed totalled $453,000.
Playford v. McRae, 2024 ONSC 5374
Facts: a son is given approximately $776,000 from his father in the twenty months before the father’s death. The deceased father died at the age of 87 and had shown signs of dementia and was suffering from cancer. Of the various transfers, one was a gift in the amount of $500,000, which included a bank’s standard form Gift Letter filled out by the son which was only dated and signed by the father. The other funds were in the form of a single cheque for $98,000 and eighty-nine different e-transfers in the amount of $2,000 each (for a total of $178,000).
Issue: does the Gift Letter rebut the presumption of resulting trust?
Finding: the Gift Letter does rebut the presumption of resulting trust.
Result: the Estate is entitled to the disputed funds, with the exception of the $500,000 subject to the Gift Letter.
Practical Implications for Estate Planning and Litigation
The cases above underscore a critical point for practitioners and clients alike: administrative bank documents are rarely determinative. To successfully rebut the presumption of resulting trust, clear and convincing evidence of donative intent is required.
Conclusion
Ontario courts remain clear that absent concrete evidence of a gift, such as a signed Gift Letter, joint account funds may be deemed assets of the estate. Practitioners should advise clients accordingly and ensure that any intended gifts are properly documented to avoid costly litigation.