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Estates & Wills & Trusts

Joint tenancy a common source of estate disputes

Joint tenancy is a double-edged sword for testators and beneficiaries, Ottawa trusts and estates lawyer Timothy N. Sullivan tells AdvocateDaily.com

In a recent case, the Court of Appeal for Ontario ruled that a woman’s interest in her house did pass to her daughter-in-law pursuant to a 'joint tenancy established by gift' after one of her children claimed the house should have been or became part of her estate that was to be shared among her children.

“The issue of joint tenancy is all too frequently the subject of a legal dispute,” says Sullivan, principal of SullivanLaw.

He says homeowners are attracted by the ease with which joint tenancy can be used to make an inter vivos gift to a family member. However, Sullivan says it’s also easy to challenge the gift once the original owner dies and the property flows automatically to the joint tenant due to the right of survivorship.

“There’s a presumption of resulting trust that has to be rebutted. The concern is: how did the newly arrived joint tenant acquire that status when it’s never been clear to the plaintiff how it came about," Sullivan explains. “It kind of works for everybody, so in a sense, it kind of works for nobody.”

In the appeal court case, the testator’s will split her estate equally among her three children. She initially purchased a house with one of her sons as a joint tenant, but he later agreed to transfer his interest to his wife following the mother’s death.

Following her diagnosis of cancer, the mother called her lawyer’s office and received assurances that her property would go to her son and his wife after her death.

However, after her death, her daughter, who did not have a good relationship with the deceased, applied to have the home declared part of the estate.

The application judge found it was clear that the presumption of resulting trust was rebutted in this case because it was clear that the mother had capacity and intended to gift the property.

At appeal, a three-judge panel unanimously dismissed the daughter’s argument that the lower court judge had erred in concluding the gift was valid.

“The application judge applied the proper test for a gift,” the decision reads. “As the application judge noted, it was not necessary for [the deceased] to state that she was gifting the property. Her intention to gift the property was evident from her instructions to her solicitor and his assistant and the executed documents, all of which supported this finding.”

Sullivan says testators can reduce the chances of a challenge like this one by explaining the reasoning behind particular decisions in their wills.

“I think there was more at play here than just the legal issues,” he says. “I always tell clients to talk to their families about their plans. So much court time and money could be avoided if there was better communication.”  

He says you don’t have to show them the will, but have a conversation and discuss what they can expect and what you intend, "and why someone’s getting the cottage and someone else isn’t,” he adds.

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