Whose Money Is It, Really? Joint Accounts, “In Trust For” Accounts and the New Trust Rules

November 2026

This article is general information, not advice for your situation. Whether a particular account is held in trust, and who beneficially owns the money in it, are legal questions that turn on the specific facts and documents in each case. Nothing here can determine the answer for you, and nothing here should be acted on without professional advice from your lawyer and your tax advisor.

Another of my articles, Whose Property Is It, Really? Trusts, Joint Title and the Family Home, dealt mainly with real estate. This article applies the same ideas to bank accounts, guaranteed investment certificates (GICs) and investment accounts. These arrangements are far more common than shared ownership of a home. Almost every family has one: a parent who added a son or daughter to a chequing account “just to help with the bills,” or a grandparent with a savings account labelled “in trust for” a grandchild.

Financial accounts raise three issues that a home usually does not:

1. There is no family home exception. The exceptions that protect many shared homes from trust reporting apply only to real estate. An account must rely on other, narrower rules.
2. Many accounts earn income every year. Someone must report the interest, dividends and realized capital gains on a tax return every year, and you need to ensure the right person is the one reporting them.
3. Money moves quickly after a death. A joint account can be emptied within days, long before anyone has looked at the will.

These rules have changed every year for several years, and much of what follows is based on my understanding of the legislation and of the Canada Revenue Agency’s (“CRA”) published positions. The CRA has declined to give opinions on whether particular family arrangements are trusts, and has advised seeking legal advice, which shows that these issues are very fact-dependent. I am not a lawyer and I am not providing legal advice. I accept no liability for errors or omissions in this article, and you should see your own legal and tax advisors before acting.

Key Terms You Need to Understand

These terms come up throughout this article, so it is worth taking a moment with each one.

Legal owner. The legal owner is the person whose name is on the account: the name in the bank’s or investment firm’s records, and usually the name on the tax slip. It is the on-paper answer to “who owns this?” It is not always the right answer.

Beneficial owner. The beneficial owner is the person to whom the money really belongs: who is entitled to spend it, who benefits from the income, and who bears any gain or loss. Most of the time the legal owner and the beneficial owner are the same person, and nobody needs to think about the difference. Tax and legal problems arise when they are not the same person, for example, when your daughter’s name is on your account but every dollar in it is yours.

Trust, trustee and beneficiary. A trust exists when one person, the trustee, holds property for the benefit of another, the beneficiary. In other words, the trustee is the legal owner and the beneficiary is the beneficial owner. No signed document is needed, and no lawyer need be involved. A trust can be created by accident, simply through the way an account is set up and used.

Express trust. In general trust law, an express trust is one created deliberately: a person intends that certain property be held by one person (the trustee) for the benefit of another (the beneficiary). Express trusts are usually in writing, but writing is not required. “We never signed anything” does not mean that no trust exists. There are two broad kinds, described next.

Bare trust. A bare trust is a form of express trust in which the person named on the account has no real decision-making power. That person simply does what the real owner says, much as an agent would. A daughter added to her mother’s account only to pay her mother’s bills, on her mother’s instructions, is the typical example. For the trust reporting rules, every person named on the account is treated as a trustee and every real owner as a beneficiary, even when the real owner is also named on the account.^{ITA 150(1.3)} A bare trust is generally excluded from the meaning of “trust” in the Income Tax Act, but the reporting rules bring it back in for filing purposes only.^{ITA 104(1), 150(1.3)} Bare trusts are often created without anyone realizing that what they intended is, in law, a trust.

Express trust other than a bare trust. In the other kind of express trust, the person named on the account genuinely makes the decisions, such as how the money is invested and when, and for what, it is paid out, for someone else’s benefit. The beneficiary is not in charge; the trustee is. A grandparent managing an account for a young grandchild, who is too young to give instructions, is the typical example. The tax rules for this kind of trust differ from those for a bare trust, as explained below.

Listed trust. The Income Tax Act sets out a list of trusts that are relieved from some or all of the new reporting, including small trusts and certain family trusts holding only cash and similar investments. These are called “listed trusts.” As explained below, being listed reduces the reporting obligation, but does not always remove it entirely.^{ITA 150(1.2)}

Attribution. Attribution rules tax income to the person who provided the money, rather than to the person who now owns it. They apply mainly to gifts between spouses and to gifts to children and grandchildren under 18. They decide who pays the tax; they do not change who owns the money.^{ITA 74.1 to 74.5}

The Test for Any Trust: The Three Certainties

For any trust to exist, bare or express, three things must be present. This requirement comes from long-established trust law rather than from the Income Tax Act:

1. Certainty of intention: a genuine, present intention to hold the money for someone else’s benefit;
2. Certainty of property: a clearly identified sum of money or account; and
3. Certainty of beneficiaries: clearly identified people who benefit, now or in the future.

Certainty of intention is where most family arrangements succeed or fail. There is an important difference between a wish (“I would like this money to go to the grandchildren someday”), which creates nothing, and a binding commitment (“This money is no longer mine; I hold it for the grandchildren”), which creates a trust. A wish leaves the money yours, and you remain free to change your mind. Where nothing has been written down, it is often impossible to tell, years later, which one happened.

The Starting Point: Who Put the Money In?

When a court must decide who owns a joint account, and nobody wrote down what was intended, it begins with a presumption set by the Supreme Court of Canada in Pecore v. Pecore.^{Pecore v. Pecore, 2007 SCC 17; Madsen Estate v. Saylor, 2007 SCC 18} The rules are these:

• A parent adds an adult child. Where a parent puts money into an account in joint names with an adult child, without being paid for it, the law presumes the child holds the money in trust for the parent. The money is still the parent’s, and on the parent’s death it belongs to the estate, to be divided under the Will. This applies whether or not the adult child is financially dependent.
• A parent and a minor child. The presumption runs the other way. The law presumes the parent intended a gift to the child.
• Grandparents, aunts and uncles. Pecore did not decide these relationships. My understanding is that the presumption of a trust for the person who contributed the money would ordinarily apply, but this should be confirmed with a lawyer.
• Spouses. This is a separate question, largely governed by provincial family property legislation, which varies from province to province.

A presumption is only a starting point. It can be overturned by evidence of what the person actually intended at the time the account was opened or the money deposited. The Supreme Court identified the kinds of evidence a court will consider: the bank’s account documents, whether a Power of Attorney was also signed, who controlled and used the money during the parent’s lifetime, and who paid the tax on the income.

That last item deserves attention. How the income has been reported on your tax returns, year after year, is itself evidence of who owns the account. Reporting it wrongly does not just create a tax problem; it can undermine the very intention you are trying to prove.

Pecore also recognized a middle position. A parent may keep full ownership of the money during their lifetime, but intend the child to receive whatever remains by right of survivorship on the parent’s death. In that case the balance passes to the child outside the estate. This is exactly the kind of intention that needs to be in writing, because siblings who were expecting an equal share of the estate are unlikely to accept it on someone’s say-so.

Scenario 1: Spouses or Siblings Who Genuinely Share an Account

Two people hold a joint account, and the money genuinely belongs to both of them. Each can use it for their own purposes. Typical examples are spouses with a household account, or two retired sisters who pool savings to share living costs.

There is no trust here. Everyone on the account is a real owner, and every real owner is on the account. The trust reporting rules exclude this arrangement entirely, and the CRA uses a joint family bank account as its own example of this exclusion.^{ITA 150(1.31)(a); CRA, Enhanced Reporting Rules for Trusts and Bare Trusts – FAQ, Q. 3.1}

Who reports the income? Generally, each owner reports interest and other income in proportion to what each contributed, not simply half each. Between spouses there is an additional rule: where one spouse gave the money to the other, or to the joint account, the income on that money is usually taxed back to the spouse who provided it.^{ITA 74.1(1), 74.2(1)} This is an income-reporting rule called “attribution,” not a trust rule, and it does not change who owns the account.

Scenario 2: Adding an Adult Child “Just to Help With the Bills”

This is the most common arrangement I see. Mother, now in her eighties, adds her daughter to her bank account so the daughter can pay bills and deal with the bank if Mother is unwell. All of the money is Mother’s. The daughter does not spend it on herself, and would not dream of doing so.

First, let me say plainly: you should not do this. Use a Power of Attorney instead, and avoid the problems described below.

However, if you do use a joint account, then on these facts the daughter is an “agent” holding legal title, and Mother is the real owner. This is a bare trust. The CRA has published almost exactly this example and reached the same conclusion.^{CRA, Enhanced Reporting Rules for Trusts and Bare Trusts – FAQ, s. 3, Example 1}

Does a trust return have to be filed? Usually not, for one reason: the account is likely to qualify as a “listed trust.” That exemption applies where every trustee is an individual, every beneficiary is an individual related to every trustee, and the account holds nothing but cash, GICs, publicly traded securities, mutual funds or similar money-like investments worth no more than $250,000 at any time in the year.^{ITA 150(1.2)(b.1)} This article deals with financial accounts, but the same $250,000 limit also applies to “personal-use property,” which may be relevant to jointly owned real estate such as a cottage. Mother and daughter are related, and for this purpose Mother is treated as related to herself, which matters because she is also on the account.^{ITA 150(1.32)(b)} A separate exemption covers any trust whose assets, of any kind, never exceed $50,000 during the year.^{ITA 150(1.2)(b)}

Note that the “genuinely shared” exclusion from Scenario 1 does not apply here, because the daughter is on the account but is not a real (that is, beneficial) owner.

Does it matter how much interest the account earns? No. The CRA has confirmed that a bare trust that qualifies as a listed trust is never required to file a trust return on its own account, whatever income, gains or sales of investments occur. The only way a return can become due is if the CRA specifically demands one.^{CRA TI 2026-1099261E5, July 14, 2026; ITA 150(1.1)(b), 150(2)}

What if the balance exceeds $250,000? Then the listed trust exemption is lost for that year, and a trust return (a “T3”) must be filed, with Schedule 15 identifying Mother and her daughter. For a bare trust, the CRA says the income sections of the return can be left blank. The return is essentially an information return.^{ITA 150(1)(c); Reg. 204.2(1); CRA FAQ, s. 3} The test is the value at any time in the year, not at December 31. A single large deposit — the proceeds from selling the house, or an inheritance parked for a few weeks — can push an otherwise small account over the line for the whole year.

Who reports the income? Mother does, on her own return, all of it, because the money is hers. The bank’s tax slip may show the daughter’s name or social insurance number, particularly if she is listed first. The daughter should not report income that is not hers, and a short note to your tax preparer explaining why can prevent a later CRA enquiry. Consider asking the bank to issue the slip in Mother’s name.

What happens on Mother’s death? Unless there is evidence that Mother intended the daughter to receive the balance by survivorship, the presumption from Pecore applies: the money belongs to the estate and is divided under the Will. Consequently, it would be subject to probate and related fees. Because of Pecore, banks may or may not release a joint account to the surviving holder where that holder is an adult child with one or more siblings. If they do, and the daughter is also one of several equal beneficiaries under the Will, she is then expected to pay the money into the estate. This can cause long delays and family friction, as described in my article titled Joint Ownership: Understand the Risks and Benefits.

Scenario 3: A Real Gift of a Share to an Adult Child

Suppose instead that Father adds his son as a joint owner to an account intending to give him half, now. The son may use his half as he wishes. Both are now genuine owners, the excluded arrangement in Scenario 1 applies, and there is no trust.^{ITA 150(1.31)(a)}

The tax consequence depends on what the account holds:

• A bank account or GICs. There is normally no capital gain, because cash does not grow in value. Each owner reports the interest on his own share from then on.
• An investment account. Giving away half of a portfolio of stocks or mutual funds is a sale, for tax purposes, of half of each holding at its market value on the date of the gift, even though no money changed hands.^{ITA 69(1)(b); 248(1) “disposition”} Father reports the capital gain on his return for that year. The son’s cost for his half is that market value.

Many families make this kind of transfer without realizing a gain arose. If it happened in an earlier year and was not reported, speak with your tax advisor about correcting the return.

Once the son truly owns half, his half is exposed to his creditors and, depending on provincial law, may be exposed to a claim if his marriage breaks down. Father can no longer take it back. Joint ownership also gives the son access to all of the money, not just his half, which can be a serious problem if, for example, he develops an addiction and needs money, or faces financial claims from a lawsuit or an unpaid loan.

Scenario 4: The Grandparent’s “In Trust For” Account

Grandfather opens an account at the bank or with his investment advisor titled “John Smith in trust for Jane Smith.” Jane is six. He deposits money for her education, and nothing else is written down.

The label proves nothing. An “in trust for” designation may reflect a genuine trust, or it may be nothing more than a reminder to Grandfather that he has earmarked these savings. There are two possibilities, and they lead to very different results.

Possibility A: It is still Grandfather’s money. If he remains free to spend the money on himself — if he could change his mind and use it for his own care, and nobody could stop him — then no trust exists. It is his account with a personal plan attached. He reports all of the income, including capital gains, on his own return. No trust return is required, and the money forms part of his estate on his death.

Possibility B: It truly belongs to Jane. If Grandfather has irrevocably given the money away, and simply holds and manages it until Jane needs it, a trust exists. Because a six-year-old cannot give instructions, Grandfather is not merely her agent. He is making the decisions. That makes it an express trust other than a bare trust, and different reporting rules apply, as I explain in the next two sections.^{ITA 104(1), 150(1.3)(a)(ii)}

If It Is a Trust: Who Reports the Income?

Even where a genuine trust exists, the tax rules prevent income from simply being shifted to a low-income child:

• Interest and dividends earned on money a grandparent has given to a grandchild under 18 are taxed back to the grandparent until the year the grandchild turns 18.^{ITA 74.1(2)}
• Capital gains are not taxed back. They are taxed in the trust or, if paid or allocated to her, to the grandchild, who often pays little or no tax because of her basic personal amount. This is why “in trust for” accounts holding equity mutual funds have long been used for children.
• A caution. If the money can come back to the grandparent, or the grandparent can later decide who receives it, a different rule taxes all of the income and capital gains back to the grandparent.^{ITA 75(2)} Informal, undocumented accounts are exactly where this is most likely, and it also triggers a trust return, as explained next.

If It Is a Trust: When Must a Return Be Filed?

This is where a grandparent’s account differs most from the bank account in Scenario 2.

An express trust other than a bare trust must ordinarily file a trust return every year. A typical grandparent’s account will qualify as a listed trust — all money-like investments, under $250,000, grandparent and grandchild related — and that relief removes Schedule 15 entirely.^{ITA 150(1.2)(b.1); Reg. 204.2(1)} But for an express trust, being listed only removes the requirement to file automatically. A return is still required for any year in which certain events occur. Those set out in the Income Tax Act are:^{ITA 150(1.1)(b)}

• the trust has tax payable for the year; or
• the trust has a taxable capital gain, or disposes of a capital property, in the year.

The CRA also administratively lists further circumstances, including where the trust holds property subject to the rule in the caution above, or where it allocates income to a beneficiary and its total income exceeds $500, more than $100 is allocated to any one beneficiary, or capital is paid out to a beneficiary.^{CRA FAQ; T4013 T3 Trust Guide; Reg. 204(1)} Those dollar thresholds do not appear in the Act or the Regulations. On my reading, they describe when the CRA will expect the return the Regulations already require, rather than statutory exemptions, so treat them with caution. It is also not yet known whether the CRA will apply a similar administrative approach to small capital gains, which the Act lists as a separate trigger.

If the account exceeds $250,000 at any time in the year, or holds anything outside the permitted list (shares of a private company, for example), it is not a listed trust. A full T3 with Schedule 15 is then required every year, whatever happens in the account.

At 18, the Money May Be Hers to Demand

If a genuine trust exists, a grandchild who reaches the age of majority may be entitled to demand the whole account, even if Grandfather intended her to wait until 25 or to spend it only on education. This comes from an old English case, Saunders v. Vautier, which has been abolished by statute in a few provinces (Alberta, Manitoba and Nova Scotia, to my knowledge) but continues to apply in most others, including, as I understand it, Prince Edward Island.^{Saunders v. Vautier (1841), 4 Beav. 115} A properly drafted trust document can manage this risk, but it may not eliminate it. Confirm the position in your province with a lawyer.

Better Alternatives for Education Savings

For education savings, a Registered Education Savings Plan (“RESP”) is usually simpler. It attracts government grants, the income grows sheltered from tax, the contributor keeps control, and an RESP trust is specifically exempt from the new trust reporting rules.^{ITA 146.1; 150(1.2)(n)(iv)} Once a grandchild is 18, two other options are a gift that she contributes to her own Tax-Free Savings Account (“TFSA”) or, if she qualifies, to her own First Home Savings Account (“FHSA”), although the money is then entirely hers.

If you do prefer an “in trust for” account, decide which possibility you intend, and write it down:

• If you want to keep control and be free to use the money yourself, do not use the words “in trust for”. Hold the account in your own name, and record that it is your money, informally earmarked.
• If you want a genuine trust, have a lawyer prepare a short trust document setting out the terms — when the grandchild receives the money, what it may be used for, and who receives it if the grandchild dies first. Before deciding, weigh the legal and tax preparation fees against the amount being set aside.

Scenario 5: Money That Already Belongs to the Child

Sometimes a parent holds money that was never theirs: a gift to the child from a relative, an inheritance left to the child, or Canada Child Benefit payments deposited to an account for the child. Because a minor cannot manage money or give instructions, the parent who holds it is, in substance, a trustee, and in my understanding this is an express trust, subject to the same listed trust exemption (usually available below $250,000) and the same filing triggers as in Scenario 4.

The income treatment differs, however. The rule that taxes income back to the giver applies to gifts from a parent or other related adult, not to the child’s own money. My understanding is that the CRA has long accepted that interest earned on Canada Child Benefit payments deposited to an account in the child’s name is the child’s income. Keep those payments in a separate account so the source is clear, and confirm the current CRA position before relying on it.

An inheritance of any size left to a minor is a different matter. Financial institutions will often not release it to a parent, and provincial law may require it to be paid into court or to a public trustee unless the Will names a trustee. That is a question for the estate’s lawyer.

Scenario 6: Holding Money for an Adult Family Member

The reverse also happens. An aunt keeps savings for her adult nephew in her own name because he cannot manage money, or an adult child keeps a parent’s savings in the child’s own account for convenience. The analysis depends on who is making the decisions:

• If the real (beneficial) owner gives the instructions and the person named on the account follows them, it is a bare trust, treated as in Scenario 2: usually listed and exempt if money-like and under $250,000, with the real owner reporting all of the income. An aunt, uncle, niece or nephew counts as related for this purpose.^{ITA 150(1.32)(a)}
• If the person named on the account decides when and whether to release the money, that person is a trustee and it is an express trust other than a bare trust, treated as in Scenario 4, with filing required in any year it has a taxable capital gain or other triggering event.
• If the people are not related — a close family friend, for example — the $250,000 limit is not available, and only the $50,000 threshold can apply.

Arrangements made to keep money away from creditors, a separating spouse, or income-tested benefits raise legal issues well beyond trust reporting. The income remains the real owner’s for tax purposes regardless. Get legal advice before relying on any arrangement of this kind.

When a Parent Loses Capacity

A bare trust depends on someone being able to give instructions. If Mother in Scenario 2 later develops dementia, her daughter can no longer be acting on Mother’s instructions, because Mother is no longer able to give them. In my view, the arrangement may then become an express trust other than a bare trust, which could change the filing analysis: an investment account that earns a capital gain could then require a return in that year. A Canada Revenue Agency representative has advised me that this is a legal question on which the CRA will not provide guidance, so treat it as a question for your legal advisors rather than a settled answer. A Power of Attorney put in place while Mother is capable avoids the question altogether, and is the best way to deal with this situation.

Points Particular to Investment Accounts

• Registered plans cannot be joint. An RRSP, RRIF, TFSA or FHSA is always in one person’s name, and these plans are specifically exempt from the trust reporting rules.^{ITA 150(1.2)(n)} The questions in this article apply to non-registered accounts. Who receives a registered plan on death is governed by the beneficiary, successor holder or successor annuitant designation, and those designations deserve their own review.
• Your broker’s own nominee arrangements are not your concern. Securities are commonly held by an investment dealer in its own name on your behalf. Where the dealer issues the usual tax slips to you, that arrangement is specifically excluded.^{ITA 150(1.31)(h)}
• Watch what is in the account. The $250,000 relief applies only where every asset is on the permitted list: cash and deposits, GICs, government and publicly traded debt, listed shares and units, mutual funds, segregated funds and exempt life insurance policies. One holding outside that list, such as shares of a private company or a private mortgage, removes the relief for the whole year.^{ITA 150(1.2)(b.1)(iii)}
• Transfers into joint names can trigger capital gains, as explained in Scenario 3, unless the transfer is only for convenience and ownership has not changed.

A Quick Reference

What to Write Down

Whatever you intend, a short, dated note or a lawyer-prepared document signed when the account is opened or the money deposited is the best evidence you can leave. Some financial institutions now have their own forms for recording intention on joint accounts, so ask. The note should answer:

1. Whose money is it now, and who contributed it?
2. Is the other person on the account for convenience only, or was a share given to them?
3. On your death, is the balance to pass to the surviving holder, or to your estate under your will?
4. For an account for a child or grandchild: can you take the money back, or has it been given away? If given, when does the child receive it, and for what purpose?
5. Who will report the income, and on whose tax return?

Keep a copy with your Will, and make sure your executor knows where it is. Then make sure your tax returns are consistent with what you wrote, because, as Pecore shows, the tax reporting is evidence too. My Real Estate Ownership Worksheet was prepared for real property, but its questions on intention, control and reversibility apply equally to accounts and may be a useful starting point before you see your lawyer.

Deadlines and Penalties

The bare trust reporting rules first apply to taxation years ending on December 31, 2026, after the CRA exempted bare trusts for earlier years.^{CRA FAQ, Q. 1.3 and 3.1} A trust return is due 90 days after the end of the year: March 31, 2027 for 2026. That is a full month before your personal tax return is due, and well before many people bring their papers to their accountant.^{ITA 150(1)(c)}

The late-filing penalty for a trust return is $25 per day, to a maximum of $2,500, or, where tax is owing, 5% of the unpaid tax plus 1% per month for up to 12 months.^{ITA 162(7), 162(1)} Where a return is not filed knowingly or through gross negligence, the penalty is the greater of $2,500 and 5% of the highest value of the trust’s property during the year.^{ITA 163(5)} Interest may also apply, and penalties may be waived in some circumstances under the CRA’s taxpayer relief provisions.^{ITA 220(3.1)}

The Bottom Line

1. Whose name is on the account does not decide who owns the money. Intention does, and the law sets out presumptions that may not match what you wanted.
2. Most everyday family accounts will not need a trust return, but for different reasons, and an “in trust for” account holding mutual funds is the one most likely to be caught, unless the CRA administratively excludes small capital gains distributions.
3. The bigger risk is usually not the filing. It is the wrong person reporting the income, the money passing to the wrong person on death, and nobody being able to prove what was intended, along with the legal fees to find the right answer.

If someone else’s name is on your account, or your name is on theirs, write down what was intended, use a Power of Attorney rather than a joint account where convenience is the only goal, and ask your lawyer and tax advisor to review the arrangement before the first filing deadline. Writing down your intentions may also reveal past transactions that were not properly reported, and you may need to file amended returns.

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Blair Corkum, CPA, CA, R.F.P., CFP, CFDS, CLU, CHS holds his Chartered Professional Accountant, Chartered Accountant, Registered Financial Planner, Chartered Financial Divorce Specialist as well as several other financial planning related designations. Blair offers hourly based fee-only personal financial planning, holds no investment or insurance licenses, and receives no commissions or referral fees. This publication should not be construed as legal or investment advice. It is neither a definitive analysis of the law nor a substitute for professional advice which you should obtain before acting on information in this article. Information may change as a result of legislation or regulations issued after this article was written.©Blair Corkum