The will says one thing. The bank account says another. In estate litigation, this disconnect often boils down to one deceptively simple question: was the transfer a genuine gift, or should the asset be returned to the estate?
This isn’t just a family squabble. It’s a legal question governed by a powerful principle: the presumption of resulting trust.
This post unpacks how the presumption works, why intention is everything, what evidence courts will consider, and how everyday situations, like joint bank accounts between parents and adult children, often become flashpoints for litigation.
What is the presumption of resulting trust?
The presumption of resulting trust kicks in when someone receives certain property without providing any consideration in return – in legal terms, a gratuitous transfer. In such cases, the law assumes that the person holding title (the transferee) is doing so in trust for the person who transferred the property (the transferor), unless the transferee can prove that a gift was actually intended.
When such transfers are challenged in court, the starting point is this presumption. The judge must weigh the evidence and determine the transferor’s true intention at the time of the transfer. If there is insufficient proof to rebut the presumption on a balance of probabilities, the law defaults to trust, not gift.
The Supreme Court of Canada confirmed this in the leading case Pecore v. Pecore, 2007 SCC 17:
” The presumption of resulting trust is a rebuttable presumption of law and general rule that applies to gratuitous transfers. When a transfer is challenged, the presumption allocates the legal burden of proof. Thus, where a transfer is made for no consideration, the onus is placed on the transferee to demonstrate that a gift was intended […] This is so because equity presumes bargains, not gifts.” (para. 24)
A real-world problem: Joint bank accounts
This doctrine most often arises in cases involving parents and adult children.
Let’s make it more concrete:
Imagine your aging mother adds your brother as a joint holder on her bank account so he can help manage her finances. He begins paying bills and assisting her with day-to-day banking. After her death, your brother claims the balance in the account is his by right of survivorship.
Unless he can clearly prove that your mother meant to give him the account as a gift, the presumption of resulting trust may apply. In other words, it is presumed he holds that money in trust for the estate, and the funds are to be distributed under the will (or under intestacy, if there is no will).
How courts apply the presumption of resulting trust
To determine whether the presumption has been rebutted, courts examine the available evidence – especially anything that sheds light on intention. The following are some of the more persuasive factors:
- The transferor’s intention at the time of the transfer, supported by contemporaneous documents or admissible subsequent conduct.
- Banking documentation: Does it expressly indicate ownership rights or survivorship intentions?
- Control and use of funds: If the transferor continued to use and control the account, this may suggest they did not intend to gift it.
- Powers of Attorney: Granting a power of attorney may signal an intent to retain control, rather than to transfer beneficial ownership.
- Tax treatment: If the transferor reported income on the asset, it may indicate they still considered it their own.
(Pecore, paras. 55–70)
Courts may also rely on evidence from drafting lawyers, notaries, financial advisors, and bank representatives to clarify the transferor’s intention (see: Laski v. Laski, 2016 ONCA 337; and Fuller v. Harper, 2010 BCCA 421).
Practically speaking, litigants often face a steep challenge: proving that a now-deceased transferor intended to make a gift. The onus is on the transferee to lead evidence of the transferor’s contrary intention on the balance of probabilities in order to rebut the presumption of resulting trust.
Why this matters in estate disputes
The presumption of resulting trust is more than a legal technicality; it’s a powerful force in estate disputes. It protects estates from unintended giveaways and ensures assets are distributed according to the testator’s wishes, not someone else’s claim or interpretation of them.
But it also means families must plan carefully. Without clear documentation and professional guidance, what feels like a simple act of help, such as adding a name to a bank account, can unravel into a costly, full-blown lawsuit.
If you are facing a dispute involving lifetime transfers or joint property, or if you need guidance to ensure your estate plan reflects your true intentions, the Estates and Trusts Litigation Group at Miller Thomson LLP is here to assist.
