The Risk of Joint Assets

“I’ll just make everything joint so my estate will be simple, and I won’t need a will or probate.” This statement is often heard by estate planning lawyers. On its face, placing assets into joint ownership may appear to be a simple way to avoid the probate process and reduce probate fees. However, joint assets are regularly subject to litigation and, rather than simplify an estate, can instead add significant administrative complexity. 

A commonly litigated claim in relation to joint assets is a resulting trust claim. The principle of resulting trust was established in Pecore v. Pecore, 2007 SCC 17 and provides that where there has been a gratuitous transfer of assets into joint tenancy, the transferee is presumed to hold those assets on resulting trust for the transferor or the transferor’s estate (there is some uncertainty as to whether this presumption applies to transfers between spouses, but this is beyond the scope of this article).

The onus, therefore, shifts to the transferee to prove that a true gift of the asset (through right of survivorship) was intended. To rebut the presumption of resulting trust, the transferee must show that, at the time the transfer was made, the transferor intended to gift the transferee that joint asset. The problem is that these claims typically arise after the death of the transferor, who can therefore no longer speak to their intention.

The Hidden Complexity of Joint Assets

In the recent case of Chung v. Chung, 2024 BCSC 1939, the deceased left a will dividing his estate equally among his four adult children (one son and three daughters). During his lifetime, the deceased added his son as a joint tenant to certain real property and as a joint account holder to several bank accounts. After the deceased’s death, his three daughters brought a claim on behalf of his estate to recover those joint assets. The son took the position that the deceased intended to gift the joint assets to him.

At trial, the Court applied the principle of resulting trust to the joint assets. Each joint asset was considered individually and to rebut the presumption, the son was required to prove the deceased’s intention to make a gift at the point in time each specific asset was made joint.

Ultimately, the Court found that the son rebutted the presumption of resulting trust but found that some of the joint assets were procured through undue influence. The son was required to account to the estate for the financial benefit received from the joint assets procured by undue influence.

As illustrated in this case, joint assets do not guarantee the simple administration of an estate. The deceased died in 2018. The trial of the matter did not take place until 2024 and required 43 days of court time.

Disclosing Joint Assets

The existence of joint assets, particularly where those joint assets are significant in comparison to estate assets, may leave personal representatives with the awkward and challenging decision of whether to further investigate and ultimately disclose those joint assets to estate beneficiaries.

In Syryda Estate v. Rathwell, 2025 ABKB 285, the executor of the deceased’s estate chose not to disclose joint assets to the estate beneficiaries. The value of the estate was approximately $150,000, and the value of the joint assets was approximately $370,000. The estate was fully administered and distributed. Two years after administration was complete—which included an informal accounting, each beneficiary signing a release, and the distribution of assets—one beneficiary commenced a proceeding against the executor seeking recovery of the joint assets on behalf of the estate.

The Court found that the release signed by the beneficiary did not bar this claim because the executor failed to disclose the joint assets. The Court held that the executor was required “to disclose all of the information required for the beneficiaries (to whom she owed fiduciary duties) to be fully informed of estate assets, both actual and presumptive, in order that they could assess their position before executing releases.”

As a result, the Court held that the joint assets were subject to the presumption of resulting trust, that the executor failed to rebut the presumption, and that those joint assets properly belonged to the estate.

Increased Administrative Burden

While claims involving joint assets are generally brought after the transferor’s death, joint assets may also result in increased administrative burden during a transferor’s lifetime as well as a loss of privacy as to how assets are held.

Where real property is transferred into joint tenancy, but the transferor holds that property in “bare trust” for the transferor (i.e., the transferee holds legal title, but the transferor retains 100% of the beneficial interest), certain reporting requirements may be triggered, including tax filing and land transparency reporting requirements.

In 2022, the federal government introduced enhanced reporting requirements on trusts, which required all bare trusts to file an annual T3 Trust Income Tax and Information Return. The Canada Revenue Agency later announced administrative relief to this filing requirement for the 2023-2025 taxation years. The CRA also announced proposed amendments to the enhanced reporting requirements to reduce filing requirements applicable to bare trusts. However, these amendments have not yet been enacted. There remains uncertainty as to what will be required of bare trusts in the future.

Bare trusts involving real property are also subject to reporting requirements under B.C.’s Land Owner Transparency Act, SBC 2019, c 23.

Shares in private companies in most jurisdictions (including B.C. and federal corporations) are subject to disclosure in a transparency report, which may require disclosure of the bare trust relationship, adding complexity to the record requirements.

In summary, the creation of joint assets must be carefully considered in each situation to ensure the benefits of joint ownership outweigh the risks and administrative complexities. The will-maker is well advised to document their intention regarding the ownership of joint assets at the outset, and these documents are now often a common part of the estate planning process.