The addition of a common-law partner as a joint owner of a bank account with a right of survivorship may give rise to initial uncertainty as to whether the arrangement constitutes a gift. While such a designation may appear to be a gratuitous transfer, the presumption of advancement does not apply to a common law spouse added onto a joint account, even if there is a right of survivorship. If litigated, courts will assess the surrounding circumstances to determine whether the transfer was intended as a true gift or whether the surviving joint owner holds the asset in trust for the estate. In the estates context, this may come before the court on the death of the individual who added the common-law partner onto their bank account and where there is a dispute between the surviving common-law partner and other estate beneficiaries as to who gets the account funds.

There are two relevant legal presumptions to consider. The presumption of advancement suggests a gift was intended in certain close relationships, such as between parents and minor children or married spouses who are joint owners of a bank account. This presumption can be rebutted with evidence that the transfer was not intended as a gift. The presumption of resulting trust, on the other hand, assumes the transferee is holding the property in trust for the transferor, and would apply in the case of gratuitous transfers between common-law spouses (as well as between parents and adult children). This presumption can be rebutted with evidence that the transfer was a gift.

So What About Real Property Owned by Common-Law Partners as Joint Tenants?

The Ontario Court of Appeal addressed this issue in MacIntyre v. Winter, 2021 ONCA 516, a case concerning a former common-law couple who had jointly acquired a residential property. One party had made a disproportionately greater financial contribution toward the purchase and contended that the funds were not intended as a gift. Although the trial judge rejected this assertion, the Court of Appeal overturned the decision.

The Court of Appeal reaffirmed that, in cases involving common-law partners, the presumption of resulting trust serves as the starting point. This legal principle requires the recipient of the asset to establish that a gift was intended. The Court further reasoned that the mere addition of a person as a joint owner does not, in itself, confer beneficial ownership. Nor does the existence of survivorship rights equate to beneficial entitlement unless there is compelling evidence of such intent. At Paragraph 33, the Court stated, “The point that a right of survivorship alone is not sufficient to rebut the presumption of a resulting trust during the parties’ joint lives is clearly made in Waters’ Law of Trusts in Canada, 4th ed. by Mark Gillen, Lionel Smith & Donovan W.M. Waters.”

This decision serves as a salient reminder that intention is paramount in determining the nature of asset transfers. Absent clear and contemporaneous documentation – such as a Deed of Gift – in circumstances involving common law partners, courts may be inclined to treat the transferred asset as part of the deceased’s estate.