Toronto Wills Lawyer Discusses Estate Planning Issues of Joint Bank Accounts and Investment Accounts

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Estate Planning – Joint Bank Accounts and Investment Accounts with Rights of Survivorship

Case Comment -Madsen Estate v. Saylor

In Madsen Estate v. Saylor [2007] 1 S.C.R. 838 (“Madsen”), a father passed away leaving 3 surviving children. One of the surviving children, P., was given a power of attorney by her father, was designated the executor of her father’s last will and testament and was jointly named on her father’s accounts with a right of survivorship (i.e. if her father died, the account would pass to her.)

At her father’s death, P. was appointed the executor of her father’s estate and divided the estate according to the provisions of her father’s last will and testament. However, P. did not include the joint accounts held with her father with a right of survivorship because she believed they solely belonged to her.

P.’s siblings sued P. claiming that it was always their father’s intention that their father’s accounts, although held jointly with P., were intended to be split among the siblings equally.

The Supreme Court of Canada decided the case by examining if there was sufficient evidence to prove that the father’s intention was that the accounts would go to P. alone. Because such evidence was lacking, the Court decided that P. held the accounts with a resulting trust (i.e. for the benefit of all the beneficiaries) and the proceeds of the accounts would have to be included in the estate to be divided equally among the beneficiaries.

The Madsen case once again highlights the importance of having a last will and testament drafted by a competent wills and estates lawyer.  In preparation of your last will and testament, our Toronto wills lawyer can insert clauses in your last will and testament confirming your intention with respect to accounts held jointly with your children so that costly litigation and bitter family animosity to prove your children’s entitlement will be avoided.