skip to Main Content
joint tenancy

Managing Joint Ownership and the Presumption of a Resulting Trust

Joint tenancy and the right of survivorship are concepts that many non-lawyers have at least some exposure to, even if they do not know it by name. For those who own property jointly with another person as joint tenants, whether it is real property (i.e. you house) or personal property (i.e. a joint bank account), the right of survivorship derived from the joint tenancy relationship means that, upon the first person’s death, the entirety of that individual’s interest in the property is transferred to the surviving joint tenant.

But that is not the end of the story. Funds that are transferred by right of survivorship may revert back to the other joint owner, or a completely different person with “beneficial interest” in property, by way of a resulting trust. Joint tenancies may be “severed” before the death of the contributing joint tenant. Dependants of an estate (such as a spouse or minor child) may seek to claim some of those transferred funds through a dependant support application. And the tax and non-tax benefits of adding individuals as joint owners to property may not be worth its unintended consequences, such as the potential for immediate payment of capital gains tax and expensive litigation brought by a deceased joint tenant’s estate.

It is for that reason that lawyers and their clients must truly understand how to manage the joint ownership of property, and appreciate the fragility of the right of survivorship where the transferor did not actually intend to transfer the property. This article provides an overview for managing joint ownership, by examining the concepts of the right of survivorship and its competing presumption of a resulting trust, the evidence applied to rebut the presumption of a resulting trust, and some estate planning considerations for professionals considering whether to recommend joint ownership of assets to their clients.

What is Joint Tenancy and the Right of Survivorship?

Right of Survivorship & Joint Tenancy

The right of survivorship is a legal right that arises from the creation of a joint tenancy.1 Joint tenancy is a form of concurrent property ownership. Where the “four unities” of title, interest, time and possession are present, co-owners hold an equal interest in the property as a unified whole.2 Where a joint tenancy continues until the death of a joint tenant, the interest of the deceased joint tenant passes to the surviving tenant.3 That right to receive the deceased joint tenant’s interest in the property is what is known as “right of survivorship”.

In contrast, property that is held as a “tenancy in common” does not pass through right of survivorship. Tenants-in-common share distinct interests in the property, and retain their interest in that property after they die or the tenancy is otherwise severed.

The fact that a joint tenant holds legal title to property does not necessarily mean that they are the property’s “real owner”. A joint tenant may own legal title to property while another individual may hold beneficial ownership of the property. The beneficial owner is effectively the real owner of the property even though it is in someone else’s name.4 Beneficial ownership may be expressly documented through a trust document, it may “result” from the operation of law, or it may be imposed as a matter of equity.

Severance of Joint Tenancy

Joint tenants can sever their joint tenancy. There are “three rules” in which a joint tenancy can be severed: (1) unilaterally acting on one’s own share, such as selling or encumbering it; (2) a mutual agreement between the co-owners to sever the joint tenancy; and (3) any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common.5

Rule 1 involves one joint tenant unilaterally selling or encumbering its own share of the property. The act destroys the four unities, and entitles each co-owner of the property to hold a distinct share in the property rather than an undivided interest in the whole.6 However, this unilateral severance of joint tenancy does not extinguish the transferee’s requirement to rebut the presumption of a resulting trust, where applicable. The transferee is not presumed to havereceived its portion of the divided asset as a gift once the joint tenancy is severed. Rather, the transferee must still rebut the presumption of a resulting trust by providing evidence that the transferor intended to gift the transferee funds.7

Rule 2 is engaged where a mutual agreement to sever is claimed to exist. Unlike Rule 3 (below), Rule 2 requires proof of an explicit intention, communicated by each joint tenant to the other, to effect the severance.8

Rule 3, referred to as the “course of dealing” rule, is perhaps the most complex. Applying the course of dealing test requires the court to determine whether the parties intended to mutually treat their interests in the property as constituting a tenancy in common. The court must look at the totality of the evidence to make this determination.

Consequences of Using Joint Ownership for Estate Planning

Tax Considerations

Adding individuals as joint tenants with a right of survivorship may result in tax-savings measures by reducing probate fees. Indeed, if an individual intends to bequeath certain property to another, adding that person as a joint tenant to the property results in an automatic transfer of the property to the transferee upon the transferor’s death, bypassing the transferor’s estate and as a result avoids paying probate fees on that transferred property.

That being the case, however, holding property as a joint tenant can create some unintended tax consequences. For example, adding a new owner to a property may trigger a “deemed disposition” of the part of the asset held by the new owner, which may require the payment of capital gains, payable by the Estate.9 Not only may this transfer trigger taxes owing, but the estate may be on the hook for those tax payments, potentially causing an unequal payment of taxes, diluting the residue of the estate, and potentially abating certain bequests under the deceased’s Will.10 These situations may be different if the new joint tenant is a spouse or common-law partner of the existing joint tenant.11 And while the Estate would have been liable to pay probate fees on those assets had they not been held jointly, those fees, even in Ontario, are quite low.12

Non-Tax Considerations

There are, of course, non-tax consequences that lawyers must also consider before recommending that a client add a joint tenant to their property or bank account. Chapter 22 of Wealth Planning Strategies for Canadians 2020 lists some of these non-tax consequences: (1) Loss of control, (2) unintentional unequal treatment of beneficiaries; and (3) exposure to family law claims.

Financial planners should also consider whether having an individual joint on an account for convenience purposes is worth the risk of the joint owner unintentionally receiving a windfall. While case law has recognized the modern social practice of elderly parents adding their adult children on their bank accounts to assist with the elderly parents with the management of their financial affairs,13 the potentially unintended consequences of the adult child retaining those funds after the parent’s death could result in windfall to the child where none was intended, and possibly the requirement that the estate trustee commence a lawsuit against the child on behalf of the estate.

If the original owner does in fact intend the property to pass to the new joint tenant (or original, non-contributing joint tenant), it may be that the joint tenant should consider signing a declaration of gift to confirm their intent that the property is to pass to the surviving joint tenant.14

Presumption of Resulting Trust Upon Gratuitous Transfer

The transfer at law from a right of survivorship may be revoked by the “presumption of resulting trust”. The presumption of resulting trust is a rebuttable presumption of law and general rule, and stands for the proposition that when a gratuitous transfer is challenged, the transferee bears the onus to demonstrate that the gift was intended.15 The presumption of resulting trust alters the general practice that, in a civil case, a party challenging a transfer bears the legal burden of proof.16

In some cases, the “presumption of advancement” will apply instead of the presumption of resulting trust. Whether the presumption of advancement applies depends on the nature of the relationship between the transferor and transferee.17 For example, the presumption of advancement would arise where there is a transfer from a parent to their minor child. Section 14 of the Ontario’s Family Law Act18 codified the common-law rule that there is a presumption of resulting trust between spouses, however it also holds that the fact that the spouses hold the property as joint tenants is proof, in the absence of other evidence to the contrary, that the spouses intended to hold the property as joint tenants.19

Leading Evidence to Rebut the Presumption of a Resulting Trust

Where a gratuitous transfer is being challenged, and where it is claimed that the transferred proceeds are being held by way of resulting trust, the trial judge will commence his or her inquiry with the applicable presumption and will weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, the transferor’s actual intention.20 The presumption will only determine the result where there is insufficient evidence to rebut it on a balance of probabilities.21 Presumptions only become relevant if, after considering the evidence and the circumstances surrounding the transfer, a court is unable to conclude the transferor’s actual intention.22

Corroborating evidence is required to rebut the presumption of a resulting trust.23 This is required under the common law, as well as in section 13 of the Evidence Act, which states prevents litigants from obtaining a judgment against an estate solely through self-serving evidence without corroboration:

In an action by or against the heirs, next of kin, executors, administrators or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision on his or her own evidence in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.24

The corroborating evidence can be direct or circumstantial, and it can consist of a single piece of evidence or several pieces considered cumulatively.25

The litigant seeking to rebut the presumption of a resulting trust must also put forth evidence of the transferor’s intent at the time of the transfer. Evidence subsequent to the transfer may also be admissible, but courts are cautious to assess its reliability.26

Joint Accounts

Regarding joint accounts, the Pecore decision provides a strong starting point to determine what evidence to lead. The following chart summarizes some evidence that the court Pecore determined was admissible to determine the intent of a transferor of funds from a joint account, and the possible questions to pose to oneself when weighing the strength of the evidence:

Type of EvidenceQuestions to Consider
Bank Documents
  • Do the bank documents provide strong evidence of the intention of the transferor regarding how the balance in the account should be treated upon the deceased’s death?
  • Is there evidence in the bank documents about who would receive the beneficial interest in these accounts?
Control and use of the account funds
  • Was the transferor the sole beneficiary of the account during his lifetime?
  • However, was that transferor the one who made the management decisions on behalf of the other account holders?
  • Was the transferor an ageing parent, and did the transferee simply refrain from accessing the account to ensure that their elderly parent had sufficient funds?
  • Is there some other intention that, despite the transferor controlling and using the funds solely, he/she still intended to gratuitously transfer the funds?
Granting a Power of Attorney
  • Is someone a joint owner and an attorney for property of the joint account? If so, that might be evidence to suggest that they were beneficially entitled to the property.
  • However, did the transferor truly appreciate the distinction between being an attorney for property and a joint owner of the accounts?
  • Is there evidence to suggest that the transferor executed the power of attorney to have assistance with other affairs beyond the account and, in turn, added a joint holder for convenience purposes only?
Tax Treatment
  • Who declares and pays income tax on the money in the joint accounts?
  • Were capital gains declared and paid for the same year that the joint account was set up or that a joint holder was added? If so, it may be evidence that the transferor intended the gratuitous transfer.

Lawyers should also be alert to the possibility that the evidence may suggest that an express trust over the funds in ajoint account was created, thus rebutting the presumption of a resulting trust for the transferor, but not necessarily proving that a gratuitous transfer to the transferee. Such was the case in the Court of Appeal decision in Sawdon Estate v. WatchTower Bible and Tract Society of Canada,27 There, the court found that, when the transferor transferred accounts into the joint names of his children, he created an express trust, with the beneficiaries being all the transferor’s children. In making that determination, the Court of Appeal relied on the trial judge’s consideration of evidence that the deceased understood how the concept of joint accounts with right of survivorship operated, he never instructed his lawyer to prepare a declaration of trust to avoid the funds being transferred by right of survivorship, and evidence from a bank representative that the deceased had advised her that he wanted all of his money to be distributed to all of his children.28

Real Property

The Court of Appeal for Ontario has provided some guidance as to what evidence could be used to rebut the presumption of a resulting trust in the context of real property.

In Mroz (Litigation guardian of) v. Mroz,29 The mother executed a will, bequeathing her share of real property to her daughter, on the condition that within a year of the mother’s death, the daughter pay $70,000 to two of the mother’s grandchildren. The Court of Appeal found that the mother’s intention was to place an obligation on her daughter, upon the mother’s death, to distribute the funds in accordance with the mother’s last will and testament. Unlike Sawdon, where an inter vivos trust was created, the intent of the deceased in this case was to create a testamentary trust, and thus a resulting trust to the deceased’s estate was presumed.

In Andrade v. Andrade, 2016 ONCA 368, the Court of Appeal considered who was the beneficial owner of a house that the deceased mother lived in, but title for which was held in her children’s names, and then eventually in the name of her daughter-in-law after one of the children died. The Court of Appeal found that the mother held the beneficial interest in the property. In making this finding, the court considered that the mother actually paid for the house and serviced the mortgage, and that in this case the presumption was a “purchase money resulting trust”. The court also noted that there was no evidence that the mother intended to confer beneficial ownership on any of her children when the house was purchased.30

In Chechui v. Nieman, 2017 ONCA 669, a man paid off a $1,000,000 line of credit in favour of both himself and his common law partner. The question arose whether such payment on behalf of his partner was a gratuitous transfer, or whether it ought to be returned to the man by way of resulting trust. The Court of Appeal found that it was important to consider what the parties intended at the time that the man repaid the line of credit.31 The common law partner on cross-examination admitted that the line of credit was a shared obligation, and that the man’s paying down that line of credit for both him and his partner was not intended to be a gift, but rather to simply pay off a debt secured against real property.

Holtby v. Draper, 2017 ONCA 932. This case involved a dispute between a husband and wife over who was the beneficial owner of a corporation that owned a farm and other property, as well as the beneficial owner of land abutting the farm, known as “Lot 8”. The wife held legal title to 50% of the shares of the corporation, and 100% of Lot 8. The Court of Appeal found that the husband held the beneficial interest in the corporation’s shares and 50% of Lot 8, but that the other 50% of Lot 8 was held by the wife. In doing so, the Court of Appeal found that there was no consideration for the husband’s transfer of shares to the wife, and rather the evidence suggests that the transfer was to avoid creditors, and that this intention does not defeat the presumption of a resulting trust. With respect to Lot 8, however, the court found that since s.14 of the Family Law Act applied such that the husband could not rely on the presumption of a resulting trust, and that the wife in fact was the beneficial owner of 50% of Lot 8.

Kent v. Kent, 2020 ONCA 390. The Court of Appeal considered a case where a surviving husband held an interest in real property that was previous held in joint tenancy between his mother-in-law and now-deceased wife. The husband relied on section 18 and 26 of the Family Law Act, for the argument that the property was a matrimonial home and that such matrimonial property ought to have been converted into a tenancy in common, and the wife’s share transferred to the husband. The Court of Appeal rejected this argument, finding that the wife in fact held the property in trust for her mother, and as such the wife never had an “interest” in the property to instigate the severance noted in s. 26 of the Family Law Act.


The right of survivorship is a powerful legal right that automatically side-steps the Estate to transfer the asset to the surviving joint tenant. The sheer efficiency of this right may provide substantial benefits, but can also create unintended and costly estate litigation between family members who feel that the joint tenant has unfairly gained from the right of survivorship, and to the contrary intention of the transferor.

Where a client receives property through right of survivorship and faces a claim for the return of those funds by way of resulting trust, the client is faced with the challenge of rebutting that resulting trust. The corroborative evidence to lead might vary depending on whether the property is real property (i.e. a house) or personally property (i.e. funds in a joint account), but the fact remains that what matters is to lead corroborative evidence that sheds light on the transferor’s intent at the time that the transfer took place.

  1.   Francis, Rachel, Estate Administration, §191 — Right of Survivorship, WestlawNext Canada, citing Weaver v. Weaver Estate, 2019 BCSC 132 (“Weaver”) at para 65.
  2.  Weaver at para 64, citing McKendry v. McKendry, 2017 BCCA 48 (“McKendry”) at para 27.
  3.   Weaver at para 65.
  4.   Pecore at para 4.
  5.   Hansen Estate v. Hansen, 2012 ONCA 112 at para 34; Williams v. Hensman (1861), 70 E.R. 862 (Eng. V.-C.), at p. 867.
  6.   Bergen v. Bergen, 2013 BCCA 492 (“Bergen”) at para 40.
  7.   Bergen at paras 41-42.
  8.   Hansen at para 36.
  9.   Van Cauwenberghe, Christine, Wealth Planning Strategies for Canadians 2020, p. 560, s.
  10.   Van Cauwenberghe, Christine, Wealth Planning Strategies for Canadians 2020, p. 563, s.
  11.   Van Cauwenberghe, Christine, Wealth Planning Strategies for Canadians 2020, p. 560, s.
  12.   For a calculation of the estate administration tax, see the “Calculating the tax” section of the Government of Ontario’s webpage on the EstateAdministration Tax, available online at Also note that, beginning January 1, 2020, the EstateAdministration Tax has been eliminated for the first $50,000 of the value of the estate.
  13.   Pecore at para 34, citing McLear v. McLear Estate (2000), 33 E.T.R. (2d) 272 (Ont. S.C.J.) at paras. 40-41.
  14.   Van Cauwenberghe, Christine, Wealth Planning Strategies for Canadians 2020, p. 560, s.
  15.   Pecore v. Pecore, 2007 SCC 17 (“Pecore”) at para 24.
  16.   Pecore at para 25.
  17.   Pecore at para 27.
  18.   Family Law Act, Family Law Act, R.S.O. 1990, c. F.3 (“FLA”).
  19.   FLA, s. 14(a).
  20.   Kerr at para 18.
  21.   Pecore at para 44.
  22.   Pecore v. Pecore, (2005) O.J. No. 3712 at para 9.
  23.   Foley v. McIntyre, 2015 ONCA 382 at para 29.
  24.   Evidence Act, R.S.O. 1990, c. E.23, s. 13.
  25.   Foley at para 29.
  26.   Kent v. Kent at para 36;
  27.   Sawdon Estate v. Watch Tower Bible and Tract Society of Canada, 2014 ONCA 101 (“Sawdon Estate”).
  28.   Sawdon Estate at paras. 37-39.
  29.   Mroz (Litigation guardian of) v. Mroz, 2015 ONCA 171.
  30.   Andrade at para 72.
  31.   Chechui v. Nieman, 2017 ONCA 368 at para 63.

The author of this blog is Peter Neufeld. Peter is a partner at Wagner Sidlofsky LLP. This Toronto office is a boutique litigation law firm whose practice is focused on estate and commercial litigation.

Related Posts and Articles
This blog is not intended to serve as a comprehensive treatment of the topic. It is not meant to be legal advice. Every case turns on its specific facts and it would be a mistake for the reader of this blog to conclude how it might impact on the reader’s case. Nothing replaces retaining a qualified, competent lawyer, well versed in this niche area of practice and getting some good legal advice.
Back To Top