Clarity of Intention Counts in Parental Gift Excluded Property Disputes
Our parental gift excluded property lawyers warn that when parents want to help their married children with advances of money or other gifts they MUST make their intentions clear at the time of the advance or the transfer of property. Our BC parental gift excluded property lawyers also caution that parents MUST also be equally clear about whether the gift is joint to both spouses or only to one of the spouses.
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Lorne MacLean, QC the head of our parental gift excluded property lawyers, notes that- BC’s first Appeal court case deciding whether property was excluded property as an advance on inheritance to one spouse or equally divided as gifted monies to both to both spouses to pay off their mortgage- came down in CLEARLY in favour of looking at the intent of the parents at the time the money was first advanced.
First BC Appeal Decision on Parental Gift Excluded Property
In Cabezas v Maxim 2016 BCCA 82 the official Court website headnote states:
the Appellant appeals the trial judge’s conclusion that proceeds from the sale of the matrimonial home were not excluded property under the Family Law Act. The appellant’s parents made substantial payments to the mortgage on the home. The judge found that the money was intended to be a gift benefiting both parties, and that the appellant’s mother formed the intention to treat it as an advance on the appellant’s inheritance afterward. He concluded that the proceeds were not excluded property. The appellant submits the money was an inheritance and therefore excluded property under the Act.
Held: the appeal is dismissed. The mortgage payments were a gift, and not excluded property. The common law, which provides interpretive context to the Act, indicates that the relevant time for assessing intention is the time of the transfer.
The Intent at the Date Of Gift, Not Later, Matters
Here is what the Court of Appeal decided on what the correct time to determine whether a gift was joint or sole is:
Did the trial judge err in determining that the proceeds from the sale of the matrimonial home were not excluded property?
Statutory Framework
[26] At the time of judgment, the pertinent parts of ss. 84 and 85 of the Family Law Act, which specify what property is to be divided between separated spouses, read as follows:
(1) Subject to section 85 [excluded property], family property is all real property and personal property as follows:
(a) on the date the spouses separate,
(i) property that is owned by at least one spouse, or
(ii) a beneficial interest of at least one spouse in property;
(b) after separation, property
(i) acquired by at least one spouse, or
(ii) in which at least one spouse acquires a beneficial interest,
that is derived from the property referred to in paragraph (a) or from the disposition of that property.
…
Excluded property
85(1) The following is excluded from family property:
(a) property acquired by a spouse before the relationship between the spouses began;
(b) gifts or inheritances to a spouse;
…
(2) A spouse claiming that property is excluded property is responsible for demonstrating that the property is excluded property.
[41] In my view, the decision by Mrs. Maxim to treat the payments as an advance on Mr. Maxim’s inheritance does not, in and of itself, on these facts, nullify her earlier intention to make a gift. Pecore (the leading SCC decision) is clear that the relevant inquiry focuses on the time of the transfer. The evidence on that point is not in dispute.
[42] I would not accede to the first ground of appeal, and would uphold the decision to divide the proceeds from the sale of the matrimonial home equally.
MacLean Family Law Can Help Win a Parental Gift Excluded Property Case
Our parental gift excluded property lawyers advise that the onus of proving excluded property is on the person alleging the property is excluded from being equally shared. To win on this parental gift excluded property onus you need to properly document the gift or inheritance or the value of property brought into a relationship. Failure to prove the property was gifted inherited otr brought into the marriage by one sopouse alone can be financially fatal and lead to equal division of the disputed property. Don’t be disappointed. Call us to find out what your rightsd are ideally before you receive the gift or inheritance and at the time you are entering into a new relationship so you don’t face aggravation years later if the relationship goes sideways.
