What presumptions apply to gratuitous transfers to adult children?

New Brunswick, Canada


The following excerpt is from SL v. CM, PM, 2013 NBQB 218 (CanLII):

To assist in determining the intention of parties in such situations, the law developed presumptions that may apply. In relation to the presumption of resulting trust and presumption of advancement, the court in Pecore v. Pecore said: “27. The presumption of resulting trust is the general rule for gratuitous transfers. However, depending on the nature of the relationship between the transferor and transferee, the presumption of a resulting trust will not arise and there will be a presumption of advancement instead: see Waters’ Law of Trusts, at p. 378. If the presumption of advancement applies, it will fall on the party challenging the transfer to rebut the presumption of a gift. 28. Historically, the presumption of advancement has been applied in two situations. The first is where the transferor is a husband and the transferee is his wife: Hyman v. Hyman, 1934 CanLII 324 (SCC), [1934] 4 D.L.R. 532 (S.C.C.), at p. 538. The second is where the transferor is a father and the transferee is his child, which is at issue in this appeal.” The court ultimately concluded that the presumption of advancement does not apply to gratuitous transfers to adult children.

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