BC Joint Bank Account Dispute Lawyers handle family law disputes and estate litigation disputes involving joint bank accounts. Concerned about your rights? Our Joint Bank Account Dispute Lawyers can explain the rights and obligations to funds held in a joint account. Call MacLean Law today – we can explain how the recent groundbreaking Court of Appeal decision Zeligs v. Janes, 2016 BCCA 280 applies to your situation!
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BC Joint Bank Account Dispute Lawyers
MacLean Law’s highly rated* family and estate litigation lawyers handle cases where two spouses or a parent and a child have a joint account. Who owns it and how much of it or in what shares and what can each joint owner do with the joint account?
When someone is incapable or does not know that someone else is using or removing all the money only can get heated very quickly. Other non joint account holding siblings of their parent can cry foul if the money is removed by their brother or sister before it is divided in an estate.
In Zeligs v. Janes, the BC Court of Appeal recently grappled with rights of joint tenants to funds held in a joint account.
In this case, one of the daughters, Diana Janes, held a property on Knox Road in Vancouver, in joint tenancy with her mother, for whom she also had power of attorney. Prior to her mother’s death Diana granted mortgages against the property. When her mother was still alive but mentally incapable, Diana sold the property, using proceeds of the sale to discharge the mortgages and depositing the remaining funds into a joint account she held with her mother.
Joint Bank Account Dispute Lawyers Can Help When Someone Takes All The Money Out Of The Joint Account
Shortly thereafter, Diana withdrew the remaining funds and used them for a personal purpose: to acquire property and investments for her and her husband’s sole benefit.
The mother died later that year, leaving a will that divided her estate equally between Diana and her sister Barbara Burnett. Diana argued that the sale proceeds of the property belonged to her by right of survivorship, and did not form part of the estate. The right of survivorship is the legal principle whereby if one, one joint tenant dies, his or her interest in the property is extinguished and passes to the surviving joint tenant(s).
Diana’s death followed her mother’s.
Diana’s deceased sister Barbara’s husband, Joseph, acting as a personal representative on behalf of Barbara’s estate, commenced an action against Diana, claiming, inter alia, that Diana had severed the joint tenancy by selling the property.
Joint Bank Account Dispute Lawyers Note Trial Judge Says 50% of Monies From Joint Account Go Back To Mother’s Estate
The trial judge held joint tenancy had not been severed by the sale, but was severed when Ms. Janes transferred the sale proceeds to her own exclusive use and benefit. In consequence, the joint tenancy became a tenancy in common, the right of survivorship was extinguished and the estate was entitled to 50 per cent of the sale proceeds.
Diana appealed the trial decision.
Court Of Appeal Agrees With Trial Judge
The Court of Appeal dismissed Diana’s appeal.
Real and personal property can be held in joint tenancy or as tenants in common, depending on the grantor’s intention. Parties can hold legal title in one form of co-ownership while holding equitable title in another, as often happens with joint bank accounts.
The BCCA held that a jointly-held legal right to withdraw funds from a joint bank account does not enable an accountholder to assume beneficial ownership of the funds on deposit by the mere act of withdrawal. In a case where one joint tenant withdraws funds for their sole benefit and without consulting the other owner, an equitable remedy may be available to the other owner to enable them to reclaim the withdrawn funds.
In this case, the deposit of the sale proceeds into the joint account was significant because the four unities of the joint tenancy were thus continued and the joint tenancy was thus continued. When Diana transferred the sale proceeds to herself and her husband, however she converted the account into a tenancy in common composed of two equal shares and extinguished the right of survivorship.
Thus, the mother’s estate was entitled to one-half of the sale proceeds of the property sold by Diana, which interest which Diana held in trust for the estate.
[75] As the Janes initially conceded, real and personal property can be held in joint tenancy or as tenants in common, depending on the grantor’s intention. In addition, parties can hold legal title in one form of co-ownership while holding equitable title in another, as often happens with joint bank accounts. A jointly-held legal right to withdraw funds from a joint bank account does not enable an accountholder to assume beneficial ownership of the funds on deposit by the mere act of withdrawal. On the contrary, where jointly-owned funds are diverted from an account by one co-owner the other may well be entitled to pursue an equitable remedy, although, as Newbury J.A. observed in Bergen, it might be difficult to do so in practice.
[76] There is nothing in Rothstein J.’s statement in Pecore that a joint bank account balance will naturally fluctuate over time that is inconsistent with the foregoing. His statement relates to the content of an inter vivos gift of survivorship rights in a joint account, not the legal and beneficial interest in funds on deposit prior to the transferor’s death.
[77] In this case, the deposit of the sale proceeds into the joint account was significant only because the four unities were thus continued. The judge found that the joint tenancy in the Knox Road property remained in place despite the mortgages, joint land sale and deposit of the sale proceeds into the joint account. The evidence and case authorities provide support for these findings: Allingham; Walker; Flannigan; Tessier. However, they also compel the conclusion that the joint tenancy was severed when Ms. Janes transferred the sale proceeds to herself and her husband while Ms. Burnett was still alive.
[78] When Ms. Janes transferred the sale proceeds to herself and her husband, she destroyed the unity of title. In doing so, she automatically severed the joint fund, converting it into a tenancy in common composed of two equal shares and extinguishing the right of survivorship. As in Stonehouse, Ms. Burnett’s interest was affected incidentally through the operation of law by Ms. Janes’ dealing with her own interest and thereby changed in character. In other words, Ms. Janes’ unilateral act effected a rule 1 severance. Rule 3 was not engaged because the parties did not mutually treat the sale proceeds as several.
[79] In the result, the judge did not err in finding that Ms. Janes severed the joint tenancy and extinguished the right of survivorship. In consequence, as he concluded, Ms. Burnett’s estate is entitled to one-half of the sale proceeds which interest Ms. Janes holds in trust for the estate.
Joint Accounts are tricky both in family law cases where someone claims an exclusion and in cases of a parent and a child. When someone is infirm or incapable the stakes are even higher. If you have a concern that a joint account is being dealt with improperly do not hesitate as disaster can ensue if you delay.
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