What is the test for determining whether a loan advanced from the parents of a married person to be used for a family purpose should be presumed to have been a gift?

British Columbia, Canada


The following excerpt is from I.S. v. M.W.E., 2005 BCSC 1034 (CanLII):

The defendant relies on Locke v. Locke 2000 BCSC 1300 for the proposition that money advanced from the parents of a married person to be used for a family purpose should, upon divorce, be presumed to have been a gift, unless there is clear evidence to the contrary. Some of the factors to be considered are set out at para. 20 of that case: 1. whether there were any contemporaneous documents evidencing a loan; 2. whether the manner for repayment is specified; 3. whether there is security held for the loan; 4. whether there are advances to one child and not others, or advances of unequal amounts to various children; 5. whether there has been any demand for payment before the separation of the parties; 6. whether there has been any partial repayment; and 7. whether there was any expectation, or likelihood, of repayment.

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