Gratuitous transfers into joint tenancy

Parents often wish to transfer their real property into joint tenancy with their adult child, or add their child as a co-owner of their bank accounts. The parents may have a number of reasons for taking such steps: to avoid probate fees, to avoid having to go through probate entirely, for convenience to allow the donee to access funds easily for the benefit of the donor, because they want that child to be a full owner of that asset with them immediately, or because they want that child to be the full owner of the asset on the death of the parent. However, the legal implications and potential consequences of gratuitously adding someone to a real estate title or to a bank account can be serious, and often what is intended to simplify a matter results in litigation after the original owner dies.[1]

In this two-part series, we will be discussing some of the implications of gratuitously transferring property into joint tenancy and why it is important to document what the intentions are when such a transfer is made. In this first part of the series, we will focus on what forms of ownership interests can arise from a gratuitous transfer into joint tenancy with a focus on the gift of the right of survivorship. The second part of the series will focus on the gift of the right of survivorship with respect to real property.[2]

What ownership interests can arise?

From a legal perspective, when property is gratuitously transferred into joint tenancy, there are three possible ownership scenarios that can arise:

  • i) true joint tenancy with full rights of ownership as a joint owner beneficially;
  • ii) a resulting trust where on the donor’s death the property is held on trust for the donor’s estate; or
  • iii) the gift of the right of survivorship where the donee is fully entitled to what remains on the donor’s death.[3]

When considering whether to add someone gratuitously to title or to a bank account, it is important to understand that a dispute can arise as to which one of these three ownership scenarios exists and what rights or restrictions go along with each ownership interest.

True joint tenancy

The concept of joint tenancy was outlined by Justice Khullar in the  Alberta Court of Queen’s Bench decision, Pohl v Midtal[4]:

  • (i) joint tenancy requires that the four unities exist: interest, title, possession and time;
  • (ii) the right to use the property belongs to each joint tenant; and
  • (iii) the right of survivorship exists between joint tenants.[5]

When property is held in joint tenancy, each owner “… holds an equal interest in the property as a unified whole.”[6] Joint tenancy may be severed by one of the joint tenants, which converts the ownership interests of the joint tenants from joint tenancy into that of tenancy in common.[7]

Resulting trust

Pecore v Pecore[8]from the Supreme Court of Canada (“SCC”) is the governing authority in Canada on the presumption of resulting trusts. In this case, a father gratuitously placed assets in a number of bank accounts and investment accounts into joint names with his daughter and the Court had to determine who owned the assets on the father’s death. The daughter’s ex-husband argued that the assets were to form part of the father’s estate, of which he was a residuary beneficiary. Notwithstanding the SCC’s confirmation of the presumption that a gratuitous transfer to an adult child is on a resulting trust basis such that the asset falls back into the parent’s estate, it was found in this case that the joint accounts were owned by the daughter on the father’s death. The Court found that there was sufficient evidence to show the father intended to gift the joint accounts to the daughter on his passing.[9]

The gift of the right of survivorship

In Pecore, Rothstein J., after setting out the law on the presumption of resulting trusts, moved on to a discussion of the rights of survivorship that come with a gratuitous transfer into joint ownership:

In cases where the transferor’s proven intention in opening the joint account was to gift withdrawal rights to the transferee during his or her lifetime… and also to gift the balance of the account to the transferee alone on his or her death through survivorship, courts have had no difficulty finding that the presumption of a resulting trust has been rebutted and the transferee alone is entitled to the balance of the account on the transferor’s death.

In certain cases, however, courts have found that the transferor gratuitously placed his or her assets into a joint account with the transferee with the intention of retaining exclusive control of the account until his or her death, at which time the transferee alone would take the balance through survivorship [citations omitted].[10]

In a recent British Columbia Supreme Court decision, Kennedy v Smith[11], Justice Francis elaborated on the concept of the “gift of the right of survivorship” and when it can arise. Relying on her own decision in Petrick (Trustee) v Petrick[12] Justice Francis held that a gift of the right of survivorship occurs when:

… a joint tenant is gratuitously placed on title and has no beneficial entitlement to the property during the lifetime of the donor, but if the donee survives the donor, the donee will receive the entire property by right of survivorship.

There has been some debate as to whether the inter vivos gift of a right of survivorship as described in Pecore is a new kind of gift, or whether Rothstein J. was simply describing an implied trust when discussing the beneficial entitlement that arose on the facts in Pecore [citations omitted]. Either way, post-Pecore, it is possible for a donor to make a gratuitous transfer into joint tenancy which will be an immediate inter vivos gift but will allow the donor to retain the whole beneficial interest during the donor’s lifetime, and then have the property pass to the surviving joint tenant on the donor’s death.[13]

Applying the law of the presumption of resulting trusts, the transferee must prove the intent of the transferor was either to gift the right of survivorship or to gift an immediate full beneficial interest in the property. If an intended gift cannot be proven, the presumption will not have been rebutted and the asset will not be owned by the transferee on the transferor’s death, but rather will fall to the transferor’s estate.[14]

What is being gifted?

The gift of the right of survivorship is an inter vivos gift.[15] However, if the transferee only receives the beneficial entitlement on the death of the transferor and the transferor retains the beneficial ownership until the transferor passes, what exactly does the gift entail?

Addressing concerns that the legal elements required for a valid inter vivos gift are not met because the donor can continue to use the account, which includes the ability to drain the account, during his or her lifetime, Rothstein J. held that:

[t]he nature of the joint account is that the balance will fluctuate over time. The gift in these circumstances is the transferee’s survivorship interest in the account balance – whatever it may be – at the time of the transferor’s death, not to any particular amount.[16]

Other Courts have described the gift of the right of survivorship as “… a form of expectancy regarding the future. It is a right to what is left of the jointly-held interest … when the donor dies”.[17]

Although the donor can continue to use the assets in the bank account during his or her lifetime, once the gift of the right of survivorship has been made, it cannot be revoked; neither can a gift of the right of survivorship in real property.[18] However, Canadian Courts have been inconsistent as to whether the donor can continue to use real property as the donor sees fit during his or her lifetime after a gift of the right of survivorship has been made. The second part of this series will focus on how the gift of the right of survivorship is treated in the context of gratuitous transfers into joint tenancy of real property.

Should you have any questions or concerns, please feel free to reach out to a member of Miller Thomson’s Private Client Services group.


[1] The rights and risks associated with joint ownership during the transferor’s lifetime are also important factors to consider prior to making any transfer into joint tenancy; however, such rights and risks are beyond the scope of this article.

[2] “transferor”, “donor” and “grantor” will be used interchangeably in this article, as will “transferee” and “donee”.

[3] Kennedy v Smith, 2022 BCSC 1622 (“Kennedy”) at para 80.

[4] Pohl v Mitdal, 2017 ABQB 711 (“Pohl”), aff’d Pohl v Mitdal, 2018 ABCA 403 (“Pohl ABCA”).

[5] Pohl at para 27.

[6] Zeligs Estate v Janes, 2016 BCCA 280 (“Zeligs Estate”) at para 38.

[7] Simcoff v Simcoff, 2009 MBCA 80 (“Simcoff”) at para 62.

[8] Pecore v Pecore, 2007 SCC 17 (“Pecore”).

[9] Pecore at para 75; see Pecore at para 24 for Rothstein J’s legal description of the “presumption of resulting trust”.

[10] Pecore at paras 45 and 46.

[11] Kennedy, note 2.

[12] Petrick (Trustee) v Petrick, 2019 BCSC 1319 (“Petrick”).

[13] Kennedy at para 80, citing Petrick at para 40.

[14] Pecore at para 53.

[15] Pecore at para 48.

[16] Pecore at para 50.

[17] McKendry v McKendry, 2017 BCCA at para 29, citing Simcoff at para 64, Herbach v Herbach Estate, 2019 BCCA 370 at para 37, Bergen v Bergen 2013 BCCA 492 (“Bergen”) at para 37, Kennedy at para 89, and Pecore at paras 45-53.

[18] Bergen at para 41.