You just picked up a voicemail message that an ill client is on the way to your office to add an adult child as joint owner of an investment account.
Your mind starts racing: What does the client intend, and will that intention be upheld should there be a later estate challenge?
The critical principle in the Supreme Court of Canada’s Pecore decision (May, 2007) is that there is a presumption in such circumstances that it is not a beneficial transfer, though the transferee is welcome to prove otherwise. But how?
Tarling is an Ontario case from this past July that applied the Pecore principle. At trial, the financial advisor was called to testify about his dealings with the deceased father, advising the court that the elderly Mr.Tarling stated specifically that he wanted his investments to pass to this chosen son. On all the facts, the judge determined that that was indeed the intention and result of the transaction.
Still, a joint ownership transfer may be easy to complete, but often not so simple in its results. Is your client aware of all the potential tax and legal implications? And beyond that, will your client enunciate in as clear a manner as Mr.Tarling, so that you too would be comfortable giving testimony in court should you be called upon?
In the post-Pecore era, you need to be vigilant with a written log of all client communications, ideally with client sign-off of the issues you raise, and possibly including a direction that the client may only obtain tax and legal advice from appropriate licensed professionals.
Your client just arrived. Are you ready?