Many parents add an adult child’s name to a bank account or property title so the child can help manage finances, pay bills, or make things easier after death. While this often seems like a simple estate planning tool, it can create significant disputes after the parent dies if family members disagree about who was meant to inherit the asset.
This is where the law of resulting trusts comes in. It is one of the most misunderstood—and frequently litigated—areas of estate law in British Columbia.
What Is a Resulting Trust?
A resulting trust can arise when someone transfers property to another person without receiving anything in return, but it is unclear whether they intended to make a gift. In these situations, the law generally presumes the recipient is holding the property in trust for the person who transferred it unless there is evidence showing a gift was intended.
The Pecore Decision: The Key Case
The leading Canadian case on resulting trusts is Pecore v. Pecore. In that case, an elderly father added his adult daughter as a joint owner of his bank and investment accounts. After he died, a dispute arose over whether those accounts belonged to his daughter or formed part of his estate.
Before this decision, it was unclear whether a transfer from a parent to an independent adult child should be presumed to be a gift. The Supreme Court of Canada confirmed that, in most cases, it should not.
Today, when a parent transfers an asset to an adult child without receiving anything in return, the law presumes the child is holding that asset in trust for the parent’s estate—not as a gift. The child can still prove a gift was intended, but the burden of proving that intention rests with them.
Importantly, simply being listed as a joint owner does not automatically determine who legally owns an asset after death. Courts will look beyond the title itself to determine what the parent actually intended. Crucially in the Pecore case, the court also determined that a subclause in the account opening agreement with the bank that says that the account carries the right of survivorship was not enough to rebut the presumption of resulting trust.
How BC Courts Decide These Cases
British Columbia courts have consistently followed the reasoning in Pecore. When a dispute arises, the court’s focus is on determining the parent’s intention at the time the asset was transferred.
Because the parent has often passed away by the time a dispute reaches court, judges look at the surrounding evidence. This may include banking records, legal documents, how the account or property was managed, who controlled it during the parent’s lifetime, and statements made at or around the time of the transfer. Evidence created only after a dispute arises is generally given much less weight as is evidence after the transfer to the child. The intent at the exact time of the transfer is made is the key determinant.
What About Real Estate?
The same principles generally apply to jointly held real estate.
Property ownership in British Columbia is also governed by the Property Law Act, and changes to ownership must be properly registered with the Land Title and Survey Authority. Where one person pays for property but registers it in someone else’s name, or jointly with another person, the law may also presume a resulting trust unless there is evidence that a gift was intended.
The Wills, Estates and Succession Act (WESA) does not change these principles. Questions about beneficial ownership and resulting trusts continue to be determined under the common law alongside BC’s estate legislation.
What Helps Prove a Gift?
If a resulting trust dispute reaches court, the person claiming the transfer was a gift must provide convincing evidence. Courts look for objective evidence that a gift was intended, such as signed documents prepared at the time of the transfer, consistent estate planning documents, or evidence from the lawyer or notary who assisted with the transaction. Courts may be more skeptical where the parent was vulnerable, experiencing declining health, or where there are concerns about undue influence.
Lawyers routinely prepare Deeds of Gifts to document a gift in these circumstances. If the parent intends on a resulting trust, lawyers rountinely document that too, in order to provide clarity to everyone involved.
How to Protect Your Wishes
The best way to avoid a resulting trust dispute is to document your intentions when the transfer is made. If an asset is being added jointly only for convenience, make that clear in writing. Your estate planning documents should also be consistent with your intentions, and in many situations, a power of attorney may accomplish the same goal without transferring ownership.
Because the outcome of a resulting trust dispute depends heavily on the evidence and the specific facts of each case, obtaining legal advice before adding someone as a joint owner can help avoid costly disputes later. Estate planning often involves more than preparing a will. Understanding how assets are owned during your lifetime is just as important as deciding who should inherit them after you pass away.
The Bottom Line
Adding an adult child as a joint owner of a bank account, investment, or property does not automatically mean they will become the full owner after your death. In British Columbia, the law generally presumes the asset is still intended to form part of the parent’s estate unless there is sufficient evidence that a gift was intended.
Many parents add their children to bank accounts and real estate thinking that this will avoid probate for these assets. Because of resulting trusts, that is not always the case. If one asset triggers probate, generally speaking, all the assets in resulting trust need to be disclosed in the probate application.
Taking the time to consult with an estate planning lawyer before transferring ownership can help prevent costly litigation, reduce family conflict, and ensure your estate plan reflects what you actually want to happen.
Have Questions About a Jointly Held Asset?
Whether you’re planning your estate or dealing with a dispute over jointly held assets, our lawyers can help you understand the legal implications of joint ownership, ensure your wishes are clearly documented, and advise you on the best way to structure your estate plan.
At Westcoast Wills & Estates, our experienced estate planning lawyers assist clients throughout North Vancouver, Vancouver, Burnaby, Surrey, Richmond and surrounding communities with wills, trusts, probate, and estate administration. If you are considering adding someone as a joint owner of an asset or would like advice on how best to structure your estate plan, contact your nearest Westcoast Wills & Estates office to book a consultation.
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