I blogged a few years ago on the old law of presumption of
advancement and new law of presumption of resulting trust
established in the landmark Supreme Court of Canada Pecore
decision. Click here for my previous blog.
The presumption of resulting trust applies in estate contexts
when a parent gratuitously transfers his or her assets to an adult
child. The court will presume that the child is holding the
property in trust for the parent's estate, unless the child can
prove that the transfer was intended to be a gift. In other words,
the child has to rebut the presumption of resulting trust if the
child claims that the transfer was a gift.
Children who attempt to rebut the presumption of resulting trust
need strong evidence that their parent intended to gift them the
property. A recent BC judgment in McKendry v McKendry,
2015 BCSC 2433 illustrates that the evidentiary threshold is
high to rebut the presumption of resulting trust.
In Mckendry, the deceased died in 2012 and was survived
by five adult children, one son and four daughters. In 2008, she
transferred title to her home into a joint tenancy with the son. At
the time of the transfer, the deceased wanted the son to hold the
home in trust for her estate. In that regard, she made two separate
trust declarations outlining how the son would divide the home
amongst all her children upon her death.
In 2010, the deceased decided to gift the home to the
son. She provided in her Will that she gave the home to her son and
the residue of her estate to her four daughters in equal shares.
However, the deceased did not take steps to transfer the title of
the home into the son's name only. Instead, the home remained
in the names of the deceased and the son in joint tenancy.
Upon the death of the deceased, her daughters challenged the
gift of the home to the son, arguing that it was held in trust for
their mother's estate. The court held that, because of
the conflicting evidence in the form of the deceased's trust
declarations and her Will, the son was unable to rebut the
presumption of resulting trust. In particular, the court stated
that the son failed to discharge the burden on him to show that in
2008 when the joint tenancy was arranged the deceased intended to
make an immediate gift to him of the survivorship interest in the
With respect to the 2010 change of intention of the deceased,
the court commented that if in 2010 the deceased intended to make a
gift of the home to the son, then the deceased failed to take the
steps necessary to make a valid, legally binding gift.
The Mckendry decision stands as a cautionary tale to
willmakers that they must be certain of their intention before
transferring property. It is highly recommended that people consult
with professionals to make their intention expressly known and to
have professionals guide them through the steps to make a valid and
legally binding gift if a gift is indeed intended.
Thank you to Michael Wilson for his assistance with this blog
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
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On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
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