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Wednesday, March 30, 2011

Can a sibling contest money left in a joint bank account to another sibling?

This post arises from a reader question, and covers a very important issue. Despite all of the news coverage and warnings about joint bank accounts being abused by the children of seniors, thousands of elderly parents continue to add their children's names to their bank accounts. And as a result, many of them lose not only their money but their relationship with their children as well.

So I'm happy to answer this question about whether a sibling can contest money left in the joint account to the other sibling. I'm even happier to say that yes, a sibling can contest it, in certain circumstances.

The first circumstance must be that the money in the account was contributed by the parent, not the child. Most of the time, this means adding a child's name to an existing account owned by the parent. Sometimes it means putting the parent and child's name on an account that was opened to hold, for example, the funds from the sale of the parent's house. In other words, it's the parent's money.

The second circumstance is that there is no written confirmation by the parent that he or she intended the child to own the money when the parent passes away. The account was opened either for the convenience of the child helping the parent, or to avoid probate fees.

To explain this second circumstance further, I point out that a couple of years ago, Canada's highest court said that when there is a joint account (or investments or other assets) between a parent and a child, the law will presume that the child was only put on the account for convenience, and not so that the child would inherit the money. This is true UNLESS the parent left some written indication to the contrary.

This means that the child who now has the joint account doesn't own it unless the parent said so in writing at the time the name was added. Timing is important. It must be at the time the asset became joint, not months or years later. Also, telling the joint owner child verbally isn't good enough.

The parent's confirmation can be in many forms. It could be a clause in the will that confirms the joint account is supposed to belong to the child. It could be a note added to the bank form that set it up. I always encourage the staff at the Scotiabank branches to specifically ask the parent about his or her intentions, and document the answer in case the parent doesn't document it himself.

Something that holds individuals back from contesting a situation like this is that they don't want to appear greedy. I encourage anyone who questions a joint bank account between a parent and child to think of your involvement not as greed but as ensuring that your parent's plans are properly carried out.


  1. I am currently in a situatin where my father died, did not leave a will and put my younger sister's name on his account 6 years prior to his death. She had not contributed anything the account and did not activate her card to the account until my father was admitted to the hospital. He died less than a month after entering the hospital. My youngest sister had my father's name removed from the account the same day my father died. We broght it to court and the judge asigned a court administrator to take care of the estate and also said that all the assets and money should be divided evenly amongst the siblings. The administraor did not take the keys to my father's house, vehicle nor did he freeze the bank account. She was the only one with th keys to my father's house and refused any of the sibling's access to the house. She changed the vehicle over to her name and took all the contents from the house. The administrator did not take inventory of the household contents until six or seven months after he was assigned to the case and by this time nothing was left to inventory. We have askedthe administrator to take this back to court and sue my sister for the bank account and assets but so far heis dragging his feet. The administrator at one point asked my younger sister to keep half the account money and split the other half of the account money with the remaining siblings. She refused. Doesn't the administrator have to get permision from the other siblings before even making such an offer to my younger sister? Is there anything we can do to get this back to court if the administrator refuses to or is dragging his feet?

    1. Remember that an administrator or an executor works for the estate, not for the beneficiaries. There is nothing stopping you and the other beneficiaries from getting a lawyer of your own to bring the matter back to the judge. From what you've said, the assets of the estate seem to be disappearing, so I don't blame you for wanting some further action to protect them.


  2. Can 2 people listed as executors of a will not yet probated, open up a joint account after the deceased passed away to put the money 'stashed' in the house into?

    1. Yes, as long as the account is set up as an estate account, and not a personal account for them. In fact, this is exactly what executors should do so that they have one central place where all estate money, no matter where it comes from, can be held together.


  3. This is such a good article! Really explains a lot.
    Banks should have some sort of 'check box' when 2 people (other than married spouses) get a joint account. The principle account holder would choose either
    A) for convenience during the principle account holder's lifetime (after which it reverts to the estate) or
    B) right of survivorship, whereby the last one standing gets the cash.

    I don't know why banks STILL do not do this. It would save so much litigation and grief.


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