All About Estates

Joint Accounts Held as Tenants in Common: A Tool to Avoid Litigation

This blog was written by Holly LeValliant

Perhaps one of the most litigious issues in the area of estate law is the question of whether a joint account passes on survivorship when one of the owners dies, or whether the survivor holds the balance of the account in trust for the deceased’s estate.

Joint ownership of bank accounts between parents and children is common and can be a convenient tool to help children to manage their parents’ affairs during their lifetime.  However, when a parent adds their child as a joint account holder, the parent may expect the child to share the balance of the account with their siblings following the death of the parent.  When the parent’s intention has not been made clear, litigation can ensue.


An ageing parent adds one of their children as their bank account holder to assist in paying the parent’s bills.  All of the funds in the account belong to the parent.  Upon the parent’s death, the surviving account holder claims the balance of the account on a right of survivorship.  The Deceased’s Will divides the residue of their estate equally between their children.  The Deceased’s other children bring an Application to the Court seeking a declaration that the joint account was held in a resulting trust for the estate and should be divided between them in accordance with the Will. 

The leading case on the ownership interest in joint bank accounts is Pecore v. Pecore 2007 SCC 17(CanLII).  The Court held that when a parent gratuitously adds their child as a joint account holder, if that transfer is challenged, the child has the onus to prove that the parent intended the account to be a gift when the parent died.  This is called the presumption of a resulting trust, and when it is unclear what the parent’s intention was about the ownership of the account when they died, the resulting litigation can be lengthy and expensive.

Back to our scenario:  what can the parent do to prevent their children from litigating over the joint account?

The Court in Pecore considered whether banking documents can be used as a tool for joint account holders to clarify their intentions about their respective ownership interests in the account.  According to the unanimous decision, “if there is anything in the bank documents that specifically suggests the transferor’s intent regarding the beneficial interest in the account, I do not think that courts should be barred from considering it.  Indeed, the clearer the evidence in the bank documents in question, the more weight that evidence should carry.”

Let’s turn to our scenario again:  one way for the parent to avoid a dispute about their account is to specify in the account opening application that the account is held in a tenancy in common with their child.  Bank application forms often provide the option of specifying a) whether the account is held in a joint tenancy or a tenancy in common; and b) if it is held in a tenancy in common, what percentage of the account is held by each owner.  What this means is that the parent can enjoy the convenience of having their child as their joint account holder to help manage their assets during the parent’s lifetime, while making it clear in the banking records how much of the bank balance their joint account holder is entitled to receive on the parent’s death.

By placing ownership of the account in a tenancy in common, the transferor can make it clear that their portion of the account is an asset of their estate when they die.

The downside of holding a joint account as tenants in common is that probate tax would be payable on the percentage of the account owned by the transferor; however, the parent’s ability to prevent future litigation between their children can make this a good option in certain cases.

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