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CED, an Overview of the Law — Gifts: Presumptions

With Valentine’s Day behind us, gifts are on our minds. But here at the Insight blog, we’re more fascinated by the concept of legal gifts. When is something presumed to be a gift? This post looks at presumptions within the context of gifts between husband and wife, parent and child and between strangers, as well as in the purchase of land in the name of another.
CED, an Overview of the Law — Gifts: Presumptions

Gifts

 

By: Joan E. Dunlop, B.A., LL.B


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III: Presumptions

Click HERE to access the CED and the Canadian Abridgment titles for this excerpt on WestlawNext Canada

III.1: General
See Canadian Abridgment: EST.IV.2.d Estates and trusts | Gifts | Delivery | Acceptance


The acceptance of a gift by a donee is to be presumed, until his or her dissent is signified, even where the donee is not aware of the gift.1 

III.2: Purchase of Land in Name of Another
See Canadian Abridgment: EST.IV.4.f Estates and trusts | Gifts | Presumption of advancement | Miscellaneous; REA.I Real property | Interests in real property; REA.II Real property | Registration of real property; REA.III.2.c.iii Real property | Sale of land | Title | Conveyance of title | Miscellaneous

Where a person purchases land in or transfers land into the name of another person, or in or into the name of himself or herself together with another person, a resulting trust is presumed in his or her favour. The presumption may be rebutted by evidence of an intention to make a gift of the interest in the land. However, when the person in whose name the property was purchased happens to be a wife, child or near relative, the situation is reversed and the payment of the purchase money is considered prima facie to be an advance because it will be presumed that it was intended as an advancement and provision in discharge of a moral obligation or as a token of affection. This is so unless there are circumstances which furnish a strong presumption of a contrary intention, such as a contemporaneous declaration or act of the purchaser or transferor, manifesting an intention that the other party should take as a trustee, and a subsequent act or declaration by the purchaser will not suffice to negative an advancement.1 

The onus of rebutting the presumption of resulting trust is on the person claiming that the transfer of the property was a gift.2 

III.3: Between Husband and Wife
See Canadian Abridgment: DCR.XII.10.c Debtors and creditors | Fraudulent conveyances | Fraudulent intent | Presumption of fraudulent intent; EST.IV.4.b Estates and trusts | Gifts | Presumption of advancement | Between spouses; EST.IV.4.e Estates and trusts | Gifts | Presumption of advancement | Rebuttal of presumption; FAM.III.4.a.i Family law | Division of family property | Determination of ownership of property | Application of trust principles | Resulting and constructive trusts; TOR.VII.4.b.i.C.1 Torts | Fraud and misrepresentation | Duress and undue influence | Undue influence | Factors to be considered | Nature of relationship | Husband and wife; TOR.VII.4.b.i.C.4 Torts | Fraud and misrepresentation | Duress and undue influence | Undue influence | Factors to be considered | Nature of relationship | Common law spouses

Where a husband purchases property and has the conveyance taken in the name of his wife, the presumption is that he intended to make a gift by way of advancement to her. This presumption is rebuttable, and may be rebutted by showing that the husband is the beneficial owner and that the title was placed in his wife's name for some legitimate purpose.1 
This presumption has been abolished by the legislature in Ontario and Saskatchewan.2 In Alberta, the presumption has been abolished in respect of applications brought under the Matrimonial Property Act, although it has been retained for other purposes.3

Property placed or taken in the name of spouses as joint tenants raises a presumption that a joint tenancy of the property is intended.4 That presumption cannot be rebutted by evidence of a unilateral and unexpressed intention on the husband's part that the property should be his own during his lifetime.5 Subsequent acts and admissions by the wife against her interest may be, in certain circumstances, admissible in rebuttal of the presumption.6 The presumption of advancement raised by a husband putting the title of property in his wife's name is supported by evidence that at the time of the transfer he envisaged liability for gift tax, that the possibility of a separation was considered by both parties and that subsequently, in a separation agreement, the transaction was referred to as a post-nuptial settlement.7

The question whether a purchase of property by a husband in the name of his wife is a gift by way of advancement must be determined by what took place at the time the property was purchased.8 The finding of the true nature of a conveyance from a husband to his wife must be based on the facts and intentions which existed at the time the transaction occurred. It cannot be altered merely by later events (for example, divorce) which change the relationship between the parties.9
Where title is taken in the name of spouses as joint tenants and both spouses have contributed part of the purchase money, there is a presumption that during their joint lives they have a separate interest, the extent of which is determined in accordance with the amount each spouse has contributed.10 

Historically, there was no presumption of advancement in favour of a woman who was not a lawful wife of the donor11 although it was possible for a resulting trust to arise in favour of the woman.12 While the law on this issue remains unclear, the presumption of advancement has been applied to situations involving common-law spouses in British Columbia.13

The fact that a man and woman believe that they are legally married does not give rise to the presumption that a transfer of property by him to her was a gift or an advancement. The mistake as to the underlying assumption on which the transaction was based excludes intention.14 

A joint bank account in the name of both spouses is deemed to be in the name of both spouses as joint tenants.15 
Where money is deposited by a husband in his wife's bank account there is a presumption of an intent to make a gift to her. This presumption can be rebutted by evidence that the deposits were made for convenience only or that the account was treated as an agency account only. For this purpose the evidence of one spouse is admissible after the death of the other even without corroboration.16 

There is an onus resting on the husband to show that not a gift but a resulting trust was intended.17 

Moneys received by a married woman, while living with her husband, out of the proceeds of his business or saved by her out of an allowance provided by him, belong to the husband though they may be invested in her own name, unless it appears that he intended that any such savings should belong to her as her separate property as a gift from him.18 
A gift from a wife to her husband is not presumed where her money is paid by her, to him or to others, at his request.19 No presumption of a gift from a wife to her husband arises from a transfer into his name, or their joint names, of shares or stocks belonging to her, from a purchase of property with her money or from an investment of her money in his name or in their joint names.20

III.4: Between Husband and Wife
See Canadian Abridgment: EST.IV.4.c Estates and trusts | Gifts | Presumption of advancement | Parent to child; EST.IV.4.d Estates and trusts | Gifts | Presumption of advancement | Child to parent; EST.IV.4.e Estates and trusts | Gifts | Presumption of advancement | Rebuttal of presumption; FAM.III.7.b.ii.A Family law | Division of family property | Events after separation | Sale or dissipation of assets | Transfers to third parties | To children; TOR.VII.4.b.i.C.2 Torts | Fraud and misrepresentation | Duress and undue influence | Undue influence | Factors to be considered | Nature of relationship | Parent and child


A presumption of advancement may arise where a sum is advanced to a child to whom the donor stands in loco parentis.1 

The question whether a purchase of property by a parent in the name of his or her child is a gift by way of advancement must be determined by what took place at the time the property was purchased.2 

A gift to a parent from a child under age and under parental dominion stands on the same footing as any other gift once the presumption of parental influence is rebutted.3 

Historically there was no presumption of gift as between mother and daughter or mother and son since there is no common law obligation on a mother to provide for her child.4 However, more recent authorities have found a presumption of advancement between mother and child.5

An advance from a father to a son,6 if nothing more appears, is presumed to be a gift and not a loan7 and such presumption may corroborate the son's evidence in an action brought by the father's executors against the son.8 The presumption of advancement only applies to minor children.9

The presumption of advancement that arises in relation to monies paid by parents to their children leads to the
conclusion that such monies are gifts in the absence of clear evidence to the contrary.10 

Gifts inter vivos to children may be considered as advancements by portions and set off against distributive shares the said children receive on an intestacy.11 

Evidence that a parent consistently intends to benefit his or her children equally but relies on one to manage the property may rebut the presumption of advancement when the parent transfers property to that child alone.12 Conversely, one child may assume a greater burden in caring for the parent and become the natural object of the parent's benefit. A large gift may be presumed to be an acceleration of the child's share of the parent's estate.13

Where a parent makes a gift of land to a child the presumption is that it is made subject to both registered and unregistered mortgages which then actually exist against the land.14 

Where parents of a married child advance money to facilitate the purchase or improvement of the matrimonial home, and the spouses later do not agree as to the nature of that advancement, the court must presume that the money advanced is a gift to the child which on presumption of advancement becomes a gift to the spouse.15 

It is only if a testator's intention remains unclear after the evaluation of all the evidence that the court needs to resort to the application of presumptions of advancement or resulting trust.16 

III.4: Between Strangers
See Canadian Abridgment: EST.II.4.a.v Estates and trusts | Trusts | Resulting trust | Creation | Voluntary transfer to stranger; EST.IV.4.a Estates and trusts | Gifts | Presumption of advancement | General principles; EST.IV.4.f Estates and trusts | Gifts | Presumption of advancement | Miscellaneous; FAM.III.7.b.ii.D Family law | Division of family property | Events after separation | Sale or dissipation of assets | Transfers to third parties | Miscellaneous; TOR.VII.4.b.i.C Torts | Fraud and misrepresentation | Duress and undue influence | Undue influence | Factors to be considered | Nature of relationship


The handing over of a large sum of money or valuables to a stranger raises no presumption of a gift.1 Where the parties are strangers the presumption, subject to rebuttal by clear evidence, is that a resulting trust arose in favour of the alleged donor.2


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