September 28, 2023

Do you might have a guardian who transferred a title to property into joint tenancy with another person, akin to one in all your siblings? Did that particular person present little to no consideration for the acquisition of the property? Has your guardian now handed away and is that particular person claiming sole possession of the property? Does this have an effect on your distribution beneath the phrases of a will?  This weblog will try to demystify what’s identified in property legislation as a ensuing belief declare.

As an individual ages, they could search help to hold out their funds. For instance, a guardian could add an grownup little one to their checking account as a joint account holder or switch the household residence to their little one. Upon their passing, this could creates issues. As an example, when the guardian had different youngsters who weren’t added as joint account holders or weren’t transferred an curiosity in actual property.  The guardian has now handed away and the kid who was the transferee will now be the only proprietor of the property.

What Is The Proper of Survivorship?

The place an individual collectively owns property with one other particular person after which passes away, the whole curiosity in that property passes to the opposite proprietor. In legislation, this is named the “proper of survivorship.” Usually, the one that retains possession of the property is an grownup little one who has not been given any consideration for the switch. In these circumstances, different beneficiaries of the property could argue that the intention of the testator (guardian) was by no means to reward the property to the grownup little one. Quite, the testator’s intention was for the grownup little one to help with managing their funds or to keep away from paying probate charges. In these instances, the “presumption of a ensuing belief” applies.

How is A Presumption of Ensuing Belief Decided?

As seen within the landmark Supreme Courtroom of Canada case of Pecore v. Pecore, 2007 SCC 17 (“Pecore”), within the absence of proof that the testator supposed to reward the property to a different particular person, the presumption of a ensuing belief will apply. This widespread legislation rule states that to ensure that a present to a single occasion to be legitimate, there should be proof in writing to type such a present. The presumption of a ensuing belief ‘reverses’ the switch and the onus is on the occasion claiming a present to rebut the presumption on a steadiness of chances. The Courtroom’s evaluation is on the precise intention of the transferor. As fairness presumes bargains and never items, the presumption is that the transferee is holding the property on a ensuing belief for the transferor’s property.

The presumption of a ensuing belief applies to grownup youngsters solely. The “presumption of development” applies to transfers to minor youngsters, the place the presumption is {that a} reward was supposed.

How Do you Rebut the Presumption of Ensuing Belief?

The Courtroom in Pecore at paragraphs 42 – 44 held that both the presumption of development or the presumption of a ensuing belief could also be rebutted by proof on the atypical civil commonplace of a steadiness of chances:

[42]      There was some debate amongst courts and commentators over what quantity of proof is [page814] required to rebut a presumption. With regard to the presumption of ensuing belief, some instances seem to recommend that the legal commonplace, or at the least a normal greater than the civil commonplace, is relevant: see e.g. Bayley v. Trusts and Assure Co., 1930 CanLII 427 (ON CA), [1931] 1 D.L.R. 500 (Ont. S.C., App. Div.), at p. 505; Johnstone v. Johnstone (1913), 12 D.L.R. 537 (Ont. S.C., App. Div.), at p. 539. As for the presumption of development, some instances appear to recommend that solely slight proof will likely be required to rebut the presumptions: see e.g. Pettitt v. Pettitt, [1970] A.C. 777 (H.L.), at p. 814; McGrath v. Wallis, [1995] 2 F.L.R. 114 (Eng. C.A.), at pp. 115 and 122; Dreger (Litigation Guardian of) v. Dreger (1994), 1994 CanLII 16643 (MB CA), 5 E.T.R. (2nd) 250 (Man. C.A.), at para. 31.

[43]      The load of current authority, nevertheless, means that the civil commonplace, the steadiness of chances, is relevant to rebut the presumptions: Burns Property v. Mellon (2000), 2000 CanLII 5739 (ON CA), 48 O.R. (3d) 641 (C.A.), at paras. 5-21Lohia v. Lohia, [2001] EWCA Civ 1691 (BAILII), at paras. 19-21; Dagle, at p. 210; Re Wilson, at para. 52. See additionally Sopinka et al., at p. 116. That is additionally my view. I see no cause to depart from the conventional civil commonplace of proof. The proof required to rebut each presumptions, due to this fact, is proof of the transferor’s opposite intention on the steadiness of chances.

[44]      As in different civil instances, whatever the authorized burden, either side to the dispute will usually convey proof to assist their place. The trial decide will start his or her inquiry with the relevant presumption and can weigh all the proof in an try to determine, on a steadiness of chances, the transferor’s precise intention. Thus, as mentioned by Sopinka et al. in The Legislation of Proof in Canada, at p. 116, the presumption will solely decide the end result the place there’s inadequate proof to rebut it on a steadiness of chances.

What’s The Greatest Means To Keep away from This?

A guardian ought to at all times doc their intention when making a switch of property to an grownup little one. Within the case of Wong v Huang 2012 BCSC 975 (“Wong”), the court docket, in affirming Pecore, held that solely the intention of the transferor is related, and intention is decided on the time of the switch. In Wong, the transferor transferred curiosity in property to a minor little one. Nevertheless, the transferor was not a guardian to the kid (the kid was his six-year-old nice nephew) so the presumption of development didn’t apply. The minor little one needed to show on a steadiness of chances that the transferor’s intention was to reward a one-half curiosity within the property to the minor little one with the intention to rebut the presumption of a ensuing belief. The court docket on this case discovered enough proof to rebut the presumption and held that the intention of the transferor was to make an unconditional reward to the minor little one of a one-half curiosity in the actual property.

There’s a excessive evidentiary threshold to rebut the presumption of a ensuing belief and this space of legislation will be technical and sophisticated. Please contact YLaw Group at 604-974-9529 in case you require help together with your ensuing belief declare.

**This text was written by Property Litigation Lawyer Dana M. Rogers.