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. Parents often consider these gifts as an advance
on the child's inheritance.
It is important to be clear with the intention behind any gifts
made to your children. This is particularly important where your
child is married or in a marriage-like relationship, as the
breakdown of your child's relationship may have unintended
financial consequences. If your child later separates from his or
her spouse, your gift may be subject to division as family
This is illustrated in a recent British Columbia Court of Appeal
decision, Cabezas v. Maxim, 2016 BCCA 82, where the Court
barring evidence to the contrary, the presumption is that a
gift to a child is a gift to that child and his or her
the relevant time to assess the intention behind the gift is
the date the gift is made, not the date the spouses separate.
In Cabezas, a son and his spouse purchased a property
approximately a year after they began living in a marriage-like
relationship. During the relationship, the couple struggled
financially. The son's parents, in an effort to help out their
son, contributed a significant amount of money to fully payout the
mortgage on the property. The couple ultimately separated and sold
the property, free of the mortgage.
In the separation proceedings, the son sought to exclude the
full sale proceeds from the division of family assets. He argued
that he, not his spouse, had paid the down payment on the property.
He also argued that the mortgage had been paid using money that his
parents had either loaned to him for that purpose or had gifted to
him as an advance on his inheritance.
The trial judge found that, at the time the mortgage payments
were made, the son's parents intended to provide financial
assistance regardless of whether the son's spouse would
benefit. In fact, the parents had provided financial assistance to
all of their children in such a manner. It was only when the
relationship broke down that the son's mother decided to treat
the assistance as an advance on the son's inheritance.
In the absence of any contemporaneous evidence that the monies
were loaned, the trial judge determined the monies were given as a
gift intended to benefit both the son and his spouse. The Court of
Appeal agreed, finding that:
the property could not be fairly categorized as "excluded
property" under the Family Law Act;
the later decision by the son's mother to treat the
mortgage payments as an advance on her son's inheritance did
not, on the facts of this case, nullify her earlier intention to
make a gift; and
it is the intention at the time the gift is made that is
determinative of its characterization.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).