In the first part of this two-part series, we discussed the ownership interests that can arise when property is gratuitously transferred into joint tenancy. We focused specifically on the gift of the right of survivorship. In this second part, we will discuss how the gift of the right of survivorship is applied when dealing with real property.
When it comes to real property, Canadian Courts are divided on whether the ability of the donor to deal with his or her property remains unrestricted during his or her lifetime when a gift of the right of survivorship has been made.
The Manitoba and British Columbia approach
Both the Manitoba Court of Appeal and the British Columbia Court of Appeal have held that the gift of the right of survivorship does not limit the donor’s right to sever the joint tenancy during the donor’s lifetime. In Simcoff v Simcoff, a mother transferred title into joint tenancy with her son. Years later, after the mother and son had a falling out, the mother sought a declaration that she was the sole owner of the property, or, in the alternative, she sought an order for partition and sale of the property. The Manitoba Court of Appeal had to decide if the lower Court erred in law in finding that the presumption of resulting trust had been rebutted and in dismissing her application for partition and sale. The Court held that:
… where an individual, such as this mother, is found to have made a gift of one-half joint interest in property to her son, she cannot retract that gift at a later point in time. However, the right of survivorship is an incident of joint tenancy that takes effect only if the joint tenancy continues to exist as of the death of one of the joint tenants. The gift of one-half of the property cannot be rescinded, but the joint tenancy can be converted into a tenancy in common, which does not carry with it the right of survivorship.
Simply, and conceptually, the fact that a “complete gift” may have been given and that this gift included a right of survivorship does not, prima facie, prevent a donor from dealing with the retained joint interest while alive…
The Court found that bank accounts can be drained and joint tenancy in real property can be severed; the gift of the right of survivorship does not prevent such actions from being taken.
The British Columbia Court of Appeal has consistently adopted this view. In 2016 in the decision of Zeligs Estate v Janes Dickson J.A. held that:
The principal and distinguishing characteristic of joint tenancy is the right of survivorship, the jus accrescendi. When one joint tenant dies, his or her interest in the property is extinguished and passes to the surviving joint tenant(s). The right of survivorship is, however, a revocable expectancy that manifests only upon success in the so-called “ultimate gamble” – survival – and then only if the joint estate has not been previously destroyed by an act of severance [citation omitted]. When given inter vivos, a gift of survivorship rights is to what is left, if anything, when the gamble is won [citation omitted].
More recently, in Kennedy, Justice Francis conducted a thorough analysis on the gift of the right of survivorship. A number of issues had to be dealt with between the parties. Mr. Smith had previously been granted an order that the property be sold and that he have sole authority over the conduct of the sale. Two of the issues at trial were whether Ms. Kennedy had been gratuitously placed on title and whether she was holding the proceeds of sale from the home on a resulting trust for Mr. Smith. After a review of the authorities, Justice Francis held that Ms. Kennedy had been gratuitously placed on title and had been gifted the right of survivorship, but the house had been sold and as such, nothing remained of the gift of the right of survivorship, and therefore the gift had no value.
These cases confirm that an inherent right of joint tenancy is the ability to sever title and a gift of the right of survivorship does not take away this right.
The Alberta and Saskatchewan approach
British Columbia’s approach stands in contrast with how Alberta and Saskatchewan courts have dealt with gift of the right of survivorship in real property. In Thorsteinson Estate v Olson, Marjorie Thorsteinson and William Olson stood in a parent/child relationship. Mrs. Thorsteinson executed a deed of gift which transferred farmland into joint tenancy with Mr. Olson with a right of survivorship. While alive, Mrs. Thorsteinson commenced an action to set aside the transfers for various reasons, including resulting trust, and in the alternative, she requested that the joint tenancy be severed. When considering the issue on severance, the Saskatchewan Court of Appeal reviewed the decision in Simcoff and held that because the Court in Simcoff was not dealing with an application for severance, the comments made by the Court were not binding. The Court in Thorsteinson Estate held that the trial judge’s finding that Mrs. Thorsteinson had gifted Mr. Olson joint ownership of the land, which included the gift of the right of survivorship, determined the issue of severance: once the gift of the right of survivorship was made, it could not be taken back.
In Pohl v Mitdal, Mr. and Mrs. Mitdal, transferred title into joint tenancy with Mrs. Mitdal’s daughter, Melva Pohl. Justice Khullar had to determine whether there could be an irrevocable gift of the right of survivorship. Justice Khullar declined to follow Simcoff, referring to the decision in Thorsteinson and the fact that the relevant analysis in Simcoff was made in obiter. Following the reasoning in Pecore, Justice Khullar went on to find that “… by gifting a joint interest in property to his or her adult children, a parent can give up his or her right to sever the joint tenancy.” In order to give effect to the intention of the gift of the right of survivorship, “… the implication is that the [transferor] will not or cannot exercise the right of severance while he is alive… To find otherwise would be to defeat the point of a gift of property that will only take effect upon the death of the transferor.”
Justice Khullar did not find that every gift of the right of survivorship is an irrevocable one, but rather that what is important is the intent of the transferor at the time the property was transferred into joint tenancy:
There is a presumption that the right of survivorship is given with the joint tenancy in a “normal” way, preserving the ability of the parent to sever. But that presumption can be rebutted by evidence that the intention of the transferor was to give an irrevocable right of survivorship which would prevent the transferor from applying to sever the joint tenancy in the future.
In further support of her decision, Justice Khullar found that because joint tenants can contract out of their right to sever, it was logical to conclude that a transferor can give up their right to severance with an irrevocable gift of the right of survivorship.
Since Pecore, it is clear that when a gratuitous transfer is made, typically from a parent to an adult child, the presumption of resulting trust will apply unless the transferee can rebut it. If evidence shows on a balance of probabilities that, at the time the transfer was made, the transferor intended this transfer to be a gift, the presumption will be rebutted. The question can then arise as to whether the gift was a full gift at the time or a gift of a right of survivorship only. In the case of a gift of the right of survivorship, the transferee will receive the property beneficially on the transferor’s death and the property will not go to the donor’s estate.
Where Courts have had to decide the issue on whether the presumption of resulting trust has been rebutted, the evidence surrounding the transferor’s intentions at the time the transfer was made is key. Did the transferor intend a true joint tenancy relationship, a resulting trust on the transferor’s death to the transferor’s estate or just the gift of the right of survivorship? If it was the gift of the right of survivorship in real property, did the transferor intend to forfeit their right to sever title during his or her lifetime? If one is contemplating making a gratuitous transfer into joint tenancy, the importance of documenting intent cannot be understated. This can often be accomplished by an explicit Deed of Gift made contemporaneously with the transfer or by the donee executing a Deed of Bare Trust indicating that the property remains beneficially owned by the transferor and the joint tenancy interest is held for the benefit of the transferor and his or her estate.
Should you have any questions or concerns, please feel free to reach out to a member of the Private Client Services team.
 Simcoff v Simcoff, 2009 MBCA 80 (“Simcoff”).
 Simcoff at paras 63 and 64.
 Simcoff at para 64.
 Zeligs Estate v Janes, 2016 BCCA 280 (“Zeligs Estate”).
 Zeligs Estate at para 41.
 Kennedy v Smith, 2022 BCSC 1622 (“Kennedy”), at paras 77, 83, 90 and 91.
 See Wong v Chong Estate, 2016 BCSC 953 for a conflicting decision from the British Columbia Supreme Court where the Court found that the evidence showed the transferor’s intention at the time of transfer into joint tenancy that the transferee would only receive a beneficial interest on the transferor’s death. This decision was relied upon in Pohl at para 53.
 For a more detailed analysis on the contrasting decisions among the Canadian provinces, along with a critique of the Alberta and Saskatchewan development of the law, see Peter Roy Cotton-O’Brien and Calvin Hancock, “The (Ir)Revocable Right of Survivorship”, 40 Est., Tr. &Pensions J. 44 (December 2020).
 Thorsteinson Estate v Olson, 2016 SKCA 134 (“Thorsteinson Estate”).
 Thorsteinson Estate at para 66; the Court also distinguished Simcoff on the facts.
 Thorsteinson Estate at para 67.
 Pohl v Mitdal, 2017 ABQB 711 (“Pohl”) at para 50, aff’d Pohl v Mitdal, 2018 ABCA 403 (“Pohl ABCA”).
 Pohl at para 50.
 Pohl at para 50.
 Pohl at para 52.
 Pohl at para 42.
 Pecore v Pecore, 2007 SCC 17.