Deceased woman’s $3-milion lottery win sparks estate fight

When Frances Lloyd checked her lottery numbers the morning after a June 2021 Lotto 6/49 draw, the Vancouver Islander couldn’t believe what she saw.

Lloyd had matched all 6 numbers, splitting the jackpot with one other player for a $3-million windfall.  

“I have always dreamed of winning,” she told the B.C. Lottery Commission in a press release announcing the result.  

The estate fight that would follow Lloyd’s death just seven months later probably wasn’t part of the dream, but sadly, it’s one that probably could have been predicted. 

According to the Vancouver Sun, two of Lloyd’s children are suing two more of their siblings for a share of the jackpot, claiming that the proceeds should be split equally among them. The story says the two sisters who launched the lawsuit are suing the siblings Lloyd had already gifted significant sums to before her death – a daughter who lived locally and a son who each received around $500,000. 

The rest of the money went into a joint account Lloyd held with the nearby daughter, and the remaining funds passed to her after the mother’s death. The plaintiffs have asked for that account to be frozen, alleging that it was only set up so that their sibling could help their mother with bill payments and incidental purchases. 

Property jointly held between parents and children are at the root of much of the estate litigation that takes place across the country – not just in B.C. 

There are good estate planning reasons for owning property jointly with a beneficiary – it can be an effective way to transfer funds while avoiding the 1.5 per-cent probate tax otherwise payable on assets in a person’s estate – as long as the intention is clear. 

For many parents, the addition of an extra account holder is only done for convenience, and they may never have considered what would happen to the money after their death. 

The lawsuit in the lottery case may help establish Lloyd’s intentions for the joint account, although the story says she left no will behind. Meanwhile, a landmark Supreme Court of Canada decision from 2007 held that adult child co-owners are presumed to hold property in trust for the parent’s estate when evidence is lacking as to intentions.

Few families have a $3-million lottery jackpot to squabble over, but the truth is that ugly feuds break out among beneficiaries over much smaller sums. And when siblings are involved, it doesn’t take much to ratchet up the tension between brothers or sisters who think the others are getting more than their fair share.

Relations between beneficiaries can get even more strained when the co-owned property is real estate, considering that houses are typically the most valuable assets in any estate, not to mention the emotional attachment that comes with a family home or cottage. 

Again, there may be tax advantages to setting up a joint tenancy with a child, which allows the property to flow automatically to the co-owner by right of survivorship.

However, homeowners may have other reasons for adding a person to title. For example, a bare trust may be a more appropriate mechanism for someone who wishes to add a person to title while retaining control of a property during their lifetime, and ensuring that it falls into their estate after death.

Whatever your intentions for joint property, it’s important to get them down in writing ahead of time so that everyone is on the same page about why the joint owner has been added, what they can do with the property, and what will happen to it when you die.

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