Estate Planning

Getting Funds Paid Into Court

By Hull & Hull LLP

The recent Ontario Superior Court of Justice decision of Re Steen Estate addresses the issue of getting funds paid into court pending a determination of ownership.

In that case, the deceased left a will that divided her estate equally amongst her three sons. There was also a prior “Family Agreement” in which the deceased and her three sons agreed that the deceased’s intent was that each of her three sons would receive a one third share of her financial assets upon her death. The agreement went on to provide that all existing accounts of the deceased, whether jointly held or otherwise, would be totalled, and the value divided into three upon the deceased’s death.

The plaintiff, one of the sons of the deceased was also the estate trustee, brought a claim as against the two other sons with respect to jointly held accounts held by the two other sons. It appears that the plaintiff also held a joint account with the deceased as well.

The plaintiff brought a motion requiring the two other sons to pay the monies they held jointly with the deceased into court pending a determination of the issue.

The Court considered the test for having funds paid into court under Rule 45 of Ontario’s Rules of Civil Procedure. The three-pronged test requires that the moving party show:

1.                  That the moving party has a right to a specific fund;

2.                  That there is a serious issue to be tried regarding the moving party’s right to that fund; and

3.                  That the balance of convenience favours granting the relief sought by the party.

The motion was dismissed. The court held that there was no “specific fund” as the joint account with one of the defendants had been transferred into his investment account: the fund no longer existed. There was no evidence with respect to the other joint accounts.

The court also found that there was no “serious issue to be tried”. The intention of the deceased with respect to dividing her estate was clear.

Finally, the court held that the balance of convenience did not favour the plaintiff. The plaintiff only sought that the defendants’ joint accounts be paid into court, and not his own joint account. The court held that it would be “grossly unfair” to require the defendants to pay their joint account funds into court while allowing the plaintiff to hold onto his joint account proceeds.

This last point seems to have resonated with the judge. The court noted at several points in the decision that the plaintiff was not seeking to have his jointly held funds be paid into court as well.

Thank you for reading,

Paul Trudelle

Full post as published by Toronto Estate Law Blog on February 03, 2009 (boomark / email).