BC Presumption Of Advancement On Life Support In Family Cases?
BC family property judges have increasingly come to reject the BC presumption of advancement as overriding the clear statutory regime of excluded property in BC related to property brought into a BC spousal relationsip or property gifted to or inherited soley by one spouse. Lorne MacLean, QC published a recent CBA family law article and just lectured to a packed house at the Okanagan Family Law and ADR subsection this weekend. MacLean argued the BC presumption of advancement is dead in BC at least in cases involving the BC Family Law Act. Millions of dollars can be impacted by the excluded property rules and the confusion involving any BC presumption of advancement.
It pays to hire a top excluded property lawyer such as Lorne MacLean, QC. Call us toll free at 1-877-602-9900.
BC Presumption of Advancement at Odds With Family Law Act Excluded Property Rules
The BC presumption of advancment is problematic and involves often looking at what was intended at the time property was placed jointly or wholly in the othe rspouse’s names. The BC presumption of advancment can do mischief in cases where unwitting spoues’s follow uninformed financial planners advice or do it for creditor protection which is so common arounfd the world.
Score 7:2 Against Presumption
MacLean noted the case score is 7:2 in favour of maintaining the exclusion when excluded property is later registered jointly or solely in th eother spouse’s name. MacLean feels the BC Court of Appeal will likely uphold the exclusion even where property is later registered partially or wholly in the other spouse’s name when it statrst to decide exclued property and.
New BC Court Of Appeal Case Says Presumption is of No Significance
In Cabezas v Maxim the BC Court of Appeal telegraphed the death of the BC presumption of advancement:
[43] While not necessary for the purposes of resolving this ground of appeal, one additional point should be addressed for the purposes of clarity. I observe that at least on these facts, the trial judge erred in relying on the presumption of advancement as an alternative basis for finding that the mortgage payments made by Mr. Maxim’s parents were gifts.
[44] As noted, the trial judge relied on Wiens as authority for the application of the presumption of advancement. However, the Supreme Court of Canada’s decision in Pecore, which implicitly overrules Weins, was not put before him. In Pecore, Rothstein J. for the Court held that the presumption of advancement no longer applies between parents and adult independent children. He explained the rationale for this conclusion as follows, focusing primarily on present social conditions relating to elderly parents and adult children:
First, given that a principal justification for the presumption of advancement is parental obligation to support their dependent children, it seems to me that the presumption should not apply in respect of independent adult children. As Heeney J. noted in McLear, at para. 36, parental support obligations under provincial and federal statutes normally end when the child is no longer considered by law to be a minor: see e.g. Family Law Act, s. 31. Indeed, not only do child support obligations end when a child is no longer dependent, but often the reverse is true: an obligation may be imposed on independent adult children to support their parents in accordance with need and ability to pay: see e.g. Family Law Act, s. 32. Second, I agree with Heeney J. that it is common nowadays for ageing parents to transfer their assets into joint accounts with their adult children in order to have that child assist them in managing their financial affairs. There should therefore be a rebuttable presumption that the adult child is holding the property in trust for the ageing parent to facilitate the free and efficient management of that parent’s affairs.
[45] In Zhu v. Li, 2009 BCCA 128, at paras. 51-53, Neilson J.A. further explained the rationale for abandoning such a legal presumption in both the matrimonial and familial context. At para. 51, she said:
First, there is considerable support for the view that the presumption of advancement has lost its force in the contemporary matrimonial context. The editors of Waters’ Law of Trusts describe its origins in the 18th century, rooted in the assumption that when a husband or father transfers an asset to his wife or child, his intention is to make a gift due to the donee’s financial dependence on him and the reasonable expectation that the donee would share in his estate. They observe that this premise has lost its persuasiveness in contemporary society, to the point that the presumption of advancement has been eliminated by express legislation in the majority of Canadian provinces and territories. While it has not been abolished in British Columbia, they say that legislation dealing with the division of matrimonial property has “reduced the presumption to no significance”: D.W.M. Waters, Q.C., Mark R. Gillen, & Lionel D. Smith, Waters’ Law of Trusts in Canada, 3d ed. (Toronto: Thomson Carswell, 2005) at 377-381.
[46] It follows from Pecore and Zhu that the presumption of advancement is not applicable to the facts of this case, and I will not consider it further.
The rules are complex and excluded property rules require proper proof and documentary backup. Let us help you do things right to avoid a poor outcome. Call us at any of our 4 offices across BC in Fort St John, Kelowna, Surrey and Vancouver toll free at 1-877-602-9900.
