Joint Tenancy And Making Gifts Of The Right Of Survivorship

• Published date: 01 November 2022
• Subject Matter: Real Estate and Construction, Family and Matrimonial, Real Estate, Landlord & Tenant - Leases, Wills/ Intestacy/ Estate Planning
• Law Firm: Borden Ladner Gervais LLP
• Author: Mr Scott Kerwin

Since the Pecore decision, there has been much debate amongst practitioners and academic commentators about the doctrinal soundness of a "gift of the right of survivorship". The underlying transaction would involve a gratuitous transfer of property by A into a joint tenancy with B, but A retains full beneficial ownership of property during their lifetime. An immediate inter vivos gift of solely the "right of survivorship", however, seems inconsistent with basic principles about joint tenancies such as the requirement for the "four unities". Further, it is now clear that the transferor may effectively nullify the gift through inter vivos transactions. For instance, if A transfers a bank account to B, with the intention of only making a gift of the right of survivorship, and then drains the bank account prior to death, the value of the gift for B is nil. Likewise, transferring real property into joint tenancy, but severing the joint tenancy prior to death, will extinguish the right of survivorship: Bergen v. Bergen, 2013 BCCA 492; Zeligs Estate v. Janes, 2016 BCCA 280. The ability of the transferor A to effectively revoke the gift to B seems contrary to the irrevocable nature of gifts at law.

This point was raised, in obiter, in the recent case of Mong Alter Ego Trust No. 1 v. Yip, 2022 BCSC 1327(5 August 2022, Watchuk J.). The underlying claim was made by the trustee of an alter ego trust settled by Hilda Mong in 2009. Mrs. Mong had become the sole beneficial owner of assets upon the death of her husband Jeffrey in 2007. Some of these assets - including a property in the Langara neighborhood of Vancouver and an investment account - were owned jointly with Mrs. Mong's daughter Jennifer. The trustee of the Trust sought a declaration that these assets (now worth $7.2 million) formed part of the Trust. Jennifer claimed that the assets had been gifted to her and therefore devolved to her by right of survivorship.

The Court held that Mrs. Mong was the sole beneficial owner of these assets following her husband's death. The evidence in the case rebutted the presumption of resulting trust. Watchuk J. noted that it is easier for persons to understand the concept of a "gift" rather than a resulting trust, and courts should look for evidence of any rational purpose for the transfer other than a gift. Watchuk J. found that many arguments made by Jennifer to support a gift were illogical, internally inconsistent, or contradicted with the evidence of credible witnesses.

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