Joint Account With Niece Goes To Estate

William Powers lived to the ripe old age of 102 and prior to his death lived in his own home. Over his live he managed to accumulate $450,000 in a bank account the he, at one time, held jointly with his brother.

When his brother passed away, Mr. Powers decided to add his Niece, Marnina, as the joint owner of his bank account. The court records indicate the Mr. powers had added Marina because he needed someone to look out for him. And when advised by the bank clerk that Marina would get the money after he passed away, court records show he was comfortable with this.

Bank Documents Not Evidence

Under Canadian case law, the evidence surrounding the transfer of ownership from individual to joint with rights of survivorship must show that a gift of property was intended by the deceased.

While the evidence in the case showed that Mr. Powers did change ownership knowing that Marina would take ownership at death, the court did not view the transfer as a gift. This is because the bank registration as joint with rights of survivorship itself was only an indication that legal title was joint but was not sufficient to prove beneficial joint ownership as well.

Resulting Trust

Since Marina had been hired to care for Mr. Powers and was paid to do so, combined with an absence of other evidence proving Mr. Powers had transferred beneficial ownership to Marina, the court held that the account would pass to the estate and not to Marina.

The court deemed that Marina’s addition to the account was only for convenience and that the true intent of Mr. Powers was not to gift the account to her.

Doing It Right

These types of cases are all too common. If you intend to re-register an account into joint with right of survivorship and the intent is that person receive all of the funds in the account, then it is wise to take additional steps beyond re-registration:

Capital gain – Claiming a capital gain on the re-registration is a pretty clear indication to the courts that a gift was intended. It shows that the new owner acquired a proportional beneficial interest in the account.