Presumption of Resulting Trust and Disputed Accounts
Renwick Estate and Miller v. Stanberry (“Renwick”)[1], 2023 ONSC 5970 reiterates, once again, what constitutes sufficient evidence in order for an applicant to rebut a presumption of resulting trust. In Renwick, the applicant asked the courts to establish whether joint bank accounts (the “Disputed Accounts”) between the applicant and the deceased formed a part of the deceased’s estate. The applicant contends, based on the right of survivorship, that the funds in the disputed accounts should revert back to her.
The deceased’s daughter Betty, (the “Applicant”) and her step-sister (the “Respondent”) were both named as co-executors of their mothers’ estate. A certificate of appointment was granted on July 29, 2019, shortly after the death of the deceased on September 3, 2018. The issuance of the certificate of appointment was neither contested by the Applicant, nor, the Respondent. At the deceased’s death, she held seven joint accounts with the Applicant, totaling $128,241.41. [2]Most off these accounts were made jointly in 2015.
Each joint account contained a signature card that had been initialed by the deceased and the Applicant, demonstrating the deceased’s approval in creating joint accounts with rights of survivorship. Additionally, a financial services agreement had been registered with each account and in existence since 2011, and, updated in 2016. This agreement explained the terms and conditions of creating joint accounts.
The court found that neither the financial services agreement, nor the signature cards sufficiently demonstrated the deceased’s intention to leave the funds with the Applicant, rather than the estate:
[11] There is no direct evidence in the record as to what was specifically discussed between TD Bank and the Deceased regarding: (a) the meaning and effect of the signature card; (b) the terms regarding joint accounts in the financial services agreement; (c) the differences between a joint account with or without survivorship; and (d) the Deceased’s specific intention in checking off the survivorship option on the signature cards (for example, whether the intention in doing so may only have been an attempt to avoid probate fees).[3]
The courts rely on Pecore v Pecore,[4] for the presumptions relating to resulting trust.
[19] It is well-established that there is a presumption of a resulting trust that arises when adult children hold joint accounts with their elderly parents. The presumption is that, upon the parent’s demise, the money does not pass by right of survivorship to the child; rather, it is held in a resulting trust for the estate.[5]
The burden lies on the Applicant to rebut this presumption. Unfortunately, for the Applicant, the court ruled in favor of the Respondent on the basis that the Applicant did not provide adequate evidence to rebut the presumption of resulting trust.
The court found that the evidence provided by the Applicant did not point to the intention of the deceased. The Applicant presented signature cards, financial agreement forms and even statements from a witness (close friend of the deceased) to rebut the presumption. These factors did not sufficiently demonstrate that the deceased intended on disposing the funds to the Applicant.
The court turned to previous decisions that had facts almost identical to those found in Renwick, for example: Gastle v Gastle, 2017 ONSC 7797; Calmusky v Calmusky, 2020 ONSC 1506; and, Turner v Milne, 2021 BCSC 1370 all of which found that financial agreements and signature cards are insufficient to rebut the presumption. The court reiterated::
[33] The Applicant submits, and I agree, that the key conclusion to be drawn from these cases is that a party seeking to rebut the presumption of resulting trust cannot rely on checking off a box, or other language in banking documents explaining survivorship. There must be more evidence than this, to establish that the individual creating the joint account truly turned their mind to gifting a beneficial interest in the account.[6]
(emphasis added)
The court held that the “Disputed Accounts should be declared to be assets of the Estate”.[7] The court further commented, that the Applicant was not able to demonstrate the intention of the deceased, particularly since there wasn’t an employee present from the bank to attest to the deceased’s intention of rebutting the presumption of resulting trust. Additionally, the court stated that the deceased had not included in her will that the Disputed Accounts should pass to the Applicant, despite other areas of her will containing detailed commentary. The court also commented on the witness statement that supported the assertion of the Applicant, categorizing the affidavit of the witness as “uncorroborated hearsay”. The witness spoke to the wrong version of the deceased’s will, rather than the version of the will in respect of which a certificate of appointment was granted.
This decision screams to the importance of appropriate estate planning and confirms that bank forms such as described within will not suffice to rebut the presumption of resulting trust.
—
[1] Renwick Estate and Miller v. Stanberry, 2023 ONSC 5970 (“Renwick”)
[2] Renwick at para 6
[3] Renwick at para 11
[4] Pecore v. Pecore, 2007 SCC 17 (CanLII), [2007] 1 SCR 795 (“Pecore”)
[5] Pecore at para 34
[6] Renwick at para 33
[7] Renwick at para 40
Written by: Gabriella Banhara
Posted on: November 3, 2023
Categories: Commentary
Renwick Estate and Miller v. Stanberry (“Renwick”)[1], 2023 ONSC 5970 reiterates, once again, what constitutes sufficient evidence in order for an applicant to rebut a presumption of resulting trust. In Renwick, the applicant asked the courts to establish whether joint bank accounts (the “Disputed Accounts”) between the applicant and the deceased formed a part of the deceased’s estate. The applicant contends, based on the right of survivorship, that the funds in the disputed accounts should revert back to her.
The deceased’s daughter Betty, (the “Applicant”) and her step-sister (the “Respondent”) were both named as co-executors of their mothers’ estate. A certificate of appointment was granted on July 29, 2019, shortly after the death of the deceased on September 3, 2018. The issuance of the certificate of appointment was neither contested by the Applicant, nor, the Respondent. At the deceased’s death, she held seven joint accounts with the Applicant, totaling $128,241.41. [2]Most off these accounts were made jointly in 2015.
Each joint account contained a signature card that had been initialed by the deceased and the Applicant, demonstrating the deceased’s approval in creating joint accounts with rights of survivorship. Additionally, a financial services agreement had been registered with each account and in existence since 2011, and, updated in 2016. This agreement explained the terms and conditions of creating joint accounts.
The court found that neither the financial services agreement, nor the signature cards sufficiently demonstrated the deceased’s intention to leave the funds with the Applicant, rather than the estate:
[11] There is no direct evidence in the record as to what was specifically discussed between TD Bank and the Deceased regarding: (a) the meaning and effect of the signature card; (b) the terms regarding joint accounts in the financial services agreement; (c) the differences between a joint account with or without survivorship; and (d) the Deceased’s specific intention in checking off the survivorship option on the signature cards (for example, whether the intention in doing so may only have been an attempt to avoid probate fees).[3]
The courts rely on Pecore v Pecore,[4] for the presumptions relating to resulting trust.
[19] It is well-established that there is a presumption of a resulting trust that arises when adult children hold joint accounts with their elderly parents. The presumption is that, upon the parent’s demise, the money does not pass by right of survivorship to the child; rather, it is held in a resulting trust for the estate.[5]
The burden lies on the Applicant to rebut this presumption. Unfortunately, for the Applicant, the court ruled in favor of the Respondent on the basis that the Applicant did not provide adequate evidence to rebut the presumption of resulting trust.
The court found that the evidence provided by the Applicant did not point to the intention of the deceased. The Applicant presented signature cards, financial agreement forms and even statements from a witness (close friend of the deceased) to rebut the presumption. These factors did not sufficiently demonstrate that the deceased intended on disposing the funds to the Applicant.
The court turned to previous decisions that had facts almost identical to those found in Renwick, for example: Gastle v Gastle, 2017 ONSC 7797; Calmusky v Calmusky, 2020 ONSC 1506; and, Turner v Milne, 2021 BCSC 1370 all of which found that financial agreements and signature cards are insufficient to rebut the presumption. The court reiterated::
[33] The Applicant submits, and I agree, that the key conclusion to be drawn from these cases is that a party seeking to rebut the presumption of resulting trust cannot rely on checking off a box, or other language in banking documents explaining survivorship. There must be more evidence than this, to establish that the individual creating the joint account truly turned their mind to gifting a beneficial interest in the account.[6]
(emphasis added)
The court held that the “Disputed Accounts should be declared to be assets of the Estate”.[7] The court further commented, that the Applicant was not able to demonstrate the intention of the deceased, particularly since there wasn’t an employee present from the bank to attest to the deceased’s intention of rebutting the presumption of resulting trust. Additionally, the court stated that the deceased had not included in her will that the Disputed Accounts should pass to the Applicant, despite other areas of her will containing detailed commentary. The court also commented on the witness statement that supported the assertion of the Applicant, categorizing the affidavit of the witness as “uncorroborated hearsay”. The witness spoke to the wrong version of the deceased’s will, rather than the version of the will in respect of which a certificate of appointment was granted.
This decision screams to the importance of appropriate estate planning and confirms that bank forms such as described within will not suffice to rebut the presumption of resulting trust.
—
[1] Renwick Estate and Miller v. Stanberry, 2023 ONSC 5970 (“Renwick”)
[2] Renwick at para 6
[3] Renwick at para 11
[4] Pecore v. Pecore, 2007 SCC 17 (CanLII), [2007] 1 SCR 795 (“Pecore”)
[5] Pecore at para 34
[6] Renwick at para 33
[7] Renwick at para 40
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