In Ontario, the leading case law on gifts and resulting trusts is:
🏛️ Pecore v. Pecore, 2007 SCC 17
This Supreme Court of Canada decision remains the cornerstone for understanding gratuitous transfers, especially between parents and adult children. The Court established the presumption of resulting trust, which applies when a parent transfers property to an adult child without receiving consideration. The law presumes the child holds the property in trust for the parent unless the child can prove the transfer was intended as a gift1.
🧑⚖️ Recent Ontario Cases
Balkisson v. Sandy (2025 ONSC) – This case involved a mother who funded the purchase of a home registered in her son's name. She claimed it was held in trust for her, but the court found it was a gift, based on evidence including a handwritten will and text messages. The son successfully rebutted the presumption of resulting trust2.
Doherty v. Doherty (2023 ONSC) – Reaffirmed the three-part test for proving an inter vivos gift: intention to gift, delivery of the gift, and acceptance by the donee. The court emphasized the importance of clear evidence of intent3.
📘 Legal Principles: Gifts vs. Resulting Trusts
Presumption of Resulting Trust: Applies to gratuitous transfers to adult children. The transferee must prove the transfer was a gift.
Presumption of Advancement: Applies to transfers to minor children or spouses, where a gift is presumed.
Intention at the Time of Transfer is key. Courts look at documents, communications, and conduct to determine intent.
🧾 Impact on Estate Planning in Ontario
Understanding these principles is critical for anyone planning their estate:
✅ Why It Matters
Avoiding Probate Fees: Many people add adult children to joint accounts or property titles to avoid probate. But if the transfer is challenged, the presumption of resulting trust may apply, and the asset could be pulled back into the estate, subject to probate fees4.
Clarity of Intent: Without clear documentation, disputes can arise. Courts may default to the presumption of trust, leading to litigation and family conflict.
Beneficiary Designations: Even designations on RRIFs or TFSAs can be challenged under the resulting trust doctrine, as seen in Calmusky v. Calmusky, though later cases like Mak v. Mak have questioned this application5.
Estate Tax Planning: Inter vivos gifts can reduce estate tax liability, but only if properly documented and legally valid6.
🛡️ Best Practices for Estate Planners
Document Intentions Clearly: Use written declarations, updated wills, and legal advice when transferring assets.
Avoid Ambiguity in Joint Ownership: Clarify whether joint accounts or property are for convenience or intended as gifts.
Review Beneficiary Designations: Ensure they align with your overall estate plan and are legally defensible.
Consult Legal Professionals: Especially when transferring significant assets or dealing with complex family dynamics.
