In our day and age, elderly people often place their children as joint tenants on their bank accounts and other like assets. In this video, the lawyers discuss the law and address issues like the presumption of a resulting trust and the presumption of advancement.
One of the most important features of a joint tenancy is the right of survivorship. The right of survivorship means that when one of the owners dies, his or her interest in the property passes to the other named owner. To avoid this result and have an ownership interest pass to an estate, the joint tenancy must be severed so that each ownership interest is converted to a tenancy in common.
What happens when two people have a joint bank account and one of them decides to withdraw all the money? That’s one of the questions that the British Columbia Court of Appeal (“BCCA”) addressed in Zeligs v. Janes]. The case is a good case to read for those who want to better understand the law of joint tenancy, tenancy in common and joint bank accounts. For the purposes of this blog our focus is on just one question – when one joint tenant empties out the account, what are the rights of the other joint tenant? Let’s review the case and then discuss the BCCA’s conclusions on this point.
Two people own a bank account in joint tenancy. In the ordinary course, when a joint tenant dies, the surviving joint tenant is entitled to the deceased’s share. Does this situation change because it is an elderly parent and child? Maybe.
As a general rule when people own assets or property on joint account or joint tenancy there is a right of survivorship. So for example, if Frank and Peter have a joint bank account and Frank dies, then Peter is entitled to all that money by right of survivorship. Two recent Supreme Court of Canada decisions have underscored the need to carefully document a person's intentions with respect to jointly held assets.
Law suits often start when siblings discover that one child was made a joint account holder by a parent. When the parent dies the child, as the remaining joint tenant, claims the money by right of survivorship.