Our Vancouver family gift dispute and estate litigation lawyers expect a significant increase in litigation dealing with fights over whether money or property was gifted or only lent to family members because of the new BC Family law Act.
Additionally, even where a gift has been made, there can be arguments over whether the gift was made to one or more persons. Our new Family Law Act excludes the starting value of gifts from equal sharing of family property if made to one spouse only but not if it was made to both spouses in a marriage or marriage like relationship.
In the previous blog, we introduced the legal concept of gift, and its various types. Today we will continue with the first of three essential elements in perfecting a gift.
Donative Intent
The donor must have made an informed and independent decision to give the gift gratuitously to the donee at the time of donation. The following exemplify the circumstances in which the donative intent does not exist even when the property is in the physical possession of the recipient:
- A painting the donor believes a reproduction is indeed an original;
- The recipient is mistakenly taken for the intended donee;
- Consignment or bailment – for example, the money deposited at a bank, your dry cleaning at a drycleaner, or even valuables as security held at a pawnshop;
- Overpayment due to an error – the overpaid money to someone you do not intend to keep;
- Lost items found by others
In those situations, you do not intend to give away your personalty to an undesired person, so you are entitled to claim return of your property.
In a gift situation, a mere promise to make a gift in the future is unenforceable and legally ineffective* because such promise unsupported by reciprocal consideration can be revoked anytime before the gift is delivered to the donee to complete the gift. Even the promise of a future gift is accompanied by an advance transfer of the physical property in question is not enforceable. For example, a birthday gift given early to the person can be reclaimed anytime before the person’s birthday.
However, if a gift is given by way of deed, then that gift of deed become perfected the moment the deed is formally executed regardless of actual delivery being made.
The Supreme Court of Canada in its recent decision reaffirmed that intent is only relevant to the time the gift is transferred**. A promise of a gift can be revoked anytime before the transfer, but such intent of gift is not required after the gift is perfected.
Sometimes, the intent can be presumed to exist that there is a gift between spouses or parents and minor children, but not to their adult children*** under the centuries-old common law presumptions of advancement.
In the all above situations, when the property is transferred but no concurrent intent is found to exist at the transfer, such property will then revert to the original owner on the basis of a resulting trust.
Since the intent requires mental capacity, people who are found lack of legal capacity cannot give gifts, for example, infants or the mentally disabled. However, surrounding circumstances are important to determine the intent, usually by donor’s words or acts, but relationship between the parties, the value of the gift, and the size in relationship to the donor’s property as a whole, and the donor’s subsequent conduct towards the purported gift. So an infant may not possess intent, but that does not stop a birthday card from being recognized as a gift.
* The leading case is Dalhousie College v. Boutilier Estate, [1934] SCR 642.
** Nishi v. Rascal Trucking Ltd., 2013 SCC 33 at para. 2.
*** Pecore v. Pecore, 2007 SCC 17 at paras. 36 and 40.
With 4 offices across BC located in Vancouver, Surrey, Kelowna and Fort St John, MacLean Law is pleased to help you sort out any family gift issue. Call us at 1 877 602 9900.
