Supporting Gifts and Property Transfers Down the Road

Author: Joel Franz

 

Parents who transfer land or personal property to their children often do so with little or nothing in writing to document the transfer. Many would wonder why anything beyond the requisite conveyancing documents or simple transfer of possession would be necessary. Due to the historical nature of gifts, and how they are treated by the Courts, they can often be challenged by other parties, such as disenfranchised (or less enfranchised) siblings and family members. For the purposes of this blog, the parent is the party giving the gift, and the child is the one receiving the gift. However, the comments below apply equally to other parties, whether they are relatives, friends, or complete strangers.
 

Very simply, the law presumes “bargains” and not gifts. Where there is a gift, the onus is on the child to prove that the gift was (1) delivered, (2) accepted, and (3) the parent intended the gift. There is usually no issue with requirements one and two, and the dispute usually resolves around intention. This is usually complicated by the fact that when the gift is disputed, the parent has either passed away, or is incapacitated. Therefore, people need to look elsewhere for evidence of the parent’s intention.
 

Those challenging a gifts generally do so on the basis that the parent didn’t intend to actually effect a gift. The law is often on their side, as the person who received the gift usually bears the burden of proving intention. Those who have received gifts are often put in the difficult and uncomfortable position of proving that it was intentional. Further, they can be accused by others of unduly influencing the parent.
 

There are several ways to document the intention of the parties at the time the gift is transferred. For larger gifts, particularly transfers of land, the parent should always receive independent legal advice. Further, the parties can put their understanding in writing, which is always more valuable than word of mouth. Independent legal advice can be used to rebut a contention of undue influence, and is often the only practical way of doing so, particularly if the parent has passed away. For smaller gifts, getting the intention in writing is one practical solution. Getting mom or dad to write their intention of passing on an heirloom piece of jewellery, or a collectible car, is particularly useful should a family challenge the gift years later. Whatever you do, insuring the transfer is documented further than simply words spoken is key in assuring that the gift will stand years later, if challenged.