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How Intentions Can Influence Court Decisions in Estate Disputes regarding assets held in Joint Tenancy in British Columbia
Tools used to help avoid probate such as joint tenancy can come with considerable risk. An estate-planning lawyer can help you figure out what risk applies to you and help you maximize the value of your estate while minimizing your risk. Call 250-756-3823 or e-mail ar@jfblaw.ca today to get an appointment with an estate-planning lawyer at Johnston Franklin Bishop and build the estate plan that is right for you.
Conclusion:
In British Columbia, if an asset in joint tenancy is meant to be a gift after death, this intention must be clearly documented. Otherwise, a beneficiary who doesn’t benefit from the transfer could successfully challenge the asset as being part of the deceased’s estate.
The intention to make a gift of an asset held in joint tenancy can be documented through a deed of gift, through other written evidence, or included in the will.
Background:
Probate is the legal process where after someone dies, someone applies to the court to have the court officially recognize a will, or if there is no will, appoint a representative to manage the estate. It can take many months to get a grant of probate from the court, and the court will charge an average of 1.4% as a probate fee on the value of all assets of the estate that go through probate.
Lawyers who focus on estate planning use a variety of tools to help ensure as much of the estate as possible, and is prudent, avoids probate. Placing assets into joint tenancy, with the intention of leaving your interest to the other joint tenant when you die, is a frequently used tool in estate planning to keep assets outside of probate. Generally, assets held in joint tenancy that transfer outside of probate can avoid the 1.4% probate fees and reduce the amount of time and hassle it takes to transfer the asset.
Analysis:
Generally, assets held in joint tenancy are presumed by the court to be held in trust for the estate. This is known as a “rebuttable presumption” meaning the party that benefits from the transfer must give evidence to show that the assets held in joint tenancy were NOT being held in trust for the estate.
Without clear documentation of intention as to whether an asset held in joint tenancy was intended to be a gift or to be held in trust for the estate, the court will look at all other available evidence to determine the intention of the deceased.
If documents and testimony suggest that assets in joint tenancy were not meant as a gift to the other tenant, it reinforces the presumption that assets held in joint tenancy are held in resulting trust for the estate. To counter the presumption of a resulting trust from a joint tenancy, the court may consider evidence starting at the time of the transfer until the time of death of the transferor. Where evidence to rebut the presumption of a resulting trust is not definitive, the court may use its discretion to give weight to the evidence.
Rules:
1. When the legal interest in a property is transferred into joint tenancy, it can lead to three possible outcomes:
a) The creation of a true joint tenancy, in which each and every owner fully shares the property and benefits, and the last person surviving gets the whole property;
b) The creation of a resulting trust, where only one joint tenant owns the beneficial interest and one joint tenant holds the title in trust for the other joint tenant with no beneficial interest; and
c) A gift of the right of survivorship, where a joint tenant is added to the property title as a joint tenant without any beneficial ownership until the joint tenant who added them dies. Pecore v. Pecore, 2007 SCC 17; Petrick (Trustee [of]) v. Petrick, 2019 BCSC 1319.
2. The decision in Pecore v. Pecore, 2007 SCC 17 provides that the court may consider evidence arising after the establishment of the joint account, to the extent that such evidence helps in determining the original intention of the donor: Williams v. Williams Estate, 2018 BCSC 711
3. “In a case involving… …a gratuitous transfer of an interest in land to an independent adult child, it does not follow as a matter of law that an immediate irrevocable gift was made. Rather, the donee must rebut the legal presumption of a resulting trust” Schouten Estate v. Swagerman-Schouten, 2014 BCSC 2320
4. “…the analysis is focused on the transferor’s intention at the time the transfer was made” Bakken Estate v. Bakken, 2014 BCSC 1540
5. “The onus is on the petitioner to prove, on the balance of probabilities, that at the time of the Transfer the Deceased intended to irrevocably gift the right of survivorship with no ability of recall.” Di Giacomo v Di Giacomo, 2021 BCSC 2313 (CanLII)
6. “From the use of the account, it is clear that the accounts were largely set up in joint names (of WillMaker and her Daughter)in order to facilitate the payment by the plaintiff of the (WillMaker’s) bills and other obligations. There was no testimony and no documents which described an intention to gift on the part of the (WillMaker’s), either the funds in the accounts or a right of survivorship thereto. Although the daughter made certain limited deposits into the joint accounts, these largely related to her own perceived responsibility to pay back monies she felt were owed to her mother generally or on account of rent. If a gift was intended, there would presumably have been no need for her to make such repayments in her mother’s favour” Young v Veselic, 2022 BCSC 2172 (CanLII)
7. “transfer of land into joint tenancy does not automatically result in a “complete and perfect” inter-vivos gift of the right of survivorship. Rather, the transfer results in an irrevocable gift once the gratuitous intention of the transferor is confirmed by the surrounding evidence.” Beam v. Mills Estate, 2015 BCSC 1269 (CanLII)
Other Cases on Point:
Cowper-Smith v. Morgan, 2015 BCSC 1170
Re Campbell Estate, 2022 BCSC 2184
Coulston v. Dixon, 2014 ONSC 6134
Turner v. Milne, 2021 BCSC 1370
Tools used to help avoid probate such as joint tenancy can come with considerable risk. An estate-planning attorney can help you figure out what risk applies to you and help you maximize the value of your estate while minimizing your risk. Call 250-756-3823 or e-mail ar@jfblaw.ca today to get an appointment with an estate-planning attorney at Johnston Franklin Bishop and build the estate plan that is right for you.
