Quick answer: Yes. The presumption of resulting trust can be rebutted with evidence of what the person who transferred the property actually intended at the time. In British Columbia, a gratuitous transfer to an adult child is presumed to be held in trust for the transferor, but proof — on the balance of probabilities — that a gift was intended will displace that presumption.
This landmark case (Pecore v. Pecore, 2007 SCC 17) concerned the distribution of a father’s assets to his adult daughter. Two of his three children were financially secure but the third, Paula, had poor job security and was responsible for the care of her quadriplegic husband, Michael. Paula’s father placed most of his assets into joint accounts that he held with Paula.
In his will, the father left specific bequests to Paula and to Michael, as well as to Paula’s children. The residue of his estate was to be equally divided between Michael and Paula, but the assets in the joint accounts were not specifically mentioned in the will. Paula and Michael got divorced, and ownership of those assets became a point of dispute. Michael argued that the money in the accounts was not a gift to Paula, but remained part of the father’s estate and should be divided along with the rest of the estate.
When is resulting trust presumed?
In law, there is a presumption that when a person gives someone else their property without expecting anything in return, or the recipient is a fiduciary of the property owner, the recipient has not received the property as a gift but is just holding it in trust. This is called the presumption of resulting trust. The burden of displacing this presumption in court falls on the recipient of the property. There is an opposite presumption, the presumption of advancement, which is sometimes applied to transfers of assets from parents to children. At trial, the judge found that the presumption of advancement applied and that the evidence did not rebut that presumption. At the court of appeal, the judges found that there was ample evidence that Paula’s father had intended to give her the assets, so it wasn’t necessary to rely on the presumption of advancement.
The presumption of resulting trust or presumption of advancement?
The Supreme Court of Canada considered whether the presumption of advancement should apply to transfers from parents to their independent adult children, and concluded that it should not. The Supreme Court noted that some courts have held that the presumption of advancement should apply on the basis of parental affection for their adult children, but found that this is a factor to be considered in rebutting the presumption of resulting trust. Affection between adult children and their parents, the Court held, is not a basis for applying the presumption of advancement.
This decision marked a major change in Canadian law with respect to the presumption of resulting trust and the presumption of advancement. However, based on the evidence the Court found that the father in this specific case had clearly intended the balance left in the joint accounts to go only to Paula. In other words, Paula successfully rebutted the presumption of resulting trust.
What “rebutting the presumption” really means
The presumption of resulting trust is a starting point, not a verdict. Equity presumes that people bargain rather than give, so when someone transfers property for nothing in return, the law assumes the person receiving it holds it in trust for the person who gave it. Rebutting that presumption means proving the opposite: that the transferor actually intended a gift. The person who received the property carries that burden, and the standard is the ordinary civil one — the balance of probabilities. As Pecore v. Pecore, 2007 SCC 17 confirms, the whole inquiry turns on the transferor’s actual intention at the time of the transfer.
The evidence a court weighs
Because intention is the issue, courts look at whatever sheds light on it. No single document settles the question, but the following carry weight:
- Bank and account documents. The forms signed when a joint account is opened can record whether a right of survivorship was intended, though they are rarely conclusive on their own.
- Control and use of the funds. Who deposited money, who withdrew it, and who treated it as their own during the transferor’s lifetime all speak to intention.
- Why the transfer was made. A transfer made purely for convenience — so an adult child could pay bills for an aging parent — points away from a gift.
- Tax treatment. Who reported and paid tax on the income from the asset can reveal who the parties treated as the true owner.
- Later conduct and statements. Under Pecore, evidence of what the parties said and did after the transfer can be considered, weighed for how reliable it is.
Joint accounts and the right of survivorship
Joint accounts are where this presumption bites most often. A parent adds an adult child to a bank or investment account; the parent dies; the child says the balance is theirs by survivorship while the estate says it belongs to everyone named in the will. Under Pecore, the presumption of resulting trust means that balance may belong to the estate unless the child can prove the parent intended to give the right of survivorship as a gift. What passes on death is the account as it stood — subject to proof of what the parent meant by it.
When the presumption of advancement still applies
There is an opposite presumption — the presumption of advancement — under which a transfer is assumed to be a gift. After Pecore, it no longer applies to transfers from a parent to an independent adult child; those are governed by the presumption of resulting trust. It survives in narrower situations: transfers from a parent to a minor child, and, in some contexts, transfers between spouses. Which presumption applies decides who has to prove what, so getting the relationship and the facts straight at the outset shapes the entire dispute.
Record your intention while you can
Most of these fights happen after the transferor has died, when the best witness to their intention can no longer speak. That is avoidable. If you are transferring property or opening a joint account and you mean it as a gift, say so in writing and keep the record. If you mean it only for convenience, record that instead. A signed note of intention, kept with your estate papers, does more to prevent a dispute than any argument made years later by people with opposite interests.
Frequently asked questions
Who has to prove that a transfer was a gift?
The person who received the property. When someone transfers property for nothing in return, the law presumes a resulting trust — that the recipient holds it for the transferor. To keep the property, the recipient must prove, on the balance of probabilities, that the transferor actually intended a gift.
Does the presumption of advancement apply to adult children in BC?
No. Since Pecore v. Pecore, 2007 SCC 17, a gratuitous transfer from a parent to an independent adult child is presumed to be held in a resulting trust, not given as a gift. The presumption of advancement now applies mainly to transfers from a parent to a minor child, and in some contexts between spouses.
My parent put me on their bank account. Is the money mine when they die?
Not automatically. The presumption of resulting trust means the balance may belong to the estate unless you can show your parent intended to give you the right of survivorship. Evidence of their intention — account documents, how the funds were used, and what they said — decides the question.
What evidence rebuts the presumption of resulting trust?
Anything that shows the transferor’s actual intention at the time. Courts consider account-opening documents, who controlled and used the funds, why the transfer was made, tax treatment, and the parties’ later conduct and statements. No single item is decisive; the court weighs them together on the balance of probabilities.
How can I avoid a dispute over a transfer or joint account?
Record your intention in writing at the time. If you mean a gift, say so and keep the note with your estate documents. If the arrangement is only for convenience, record that instead. Clear contemporaneous evidence is far more reliable than arguments made after you are gone.
Disclaimer: The information on this page is general legal information about British Columbia law, not legal advice for any specific situation. Reading this page does not create a solicitor-client relationship. BC law changes, and the law and procedure that apply to any particular case depend on facts not covered here. For advice on your own circumstances, speak with a qualified British Columbia estate lawyer directly. Past results and illustrative scenarios do not guarantee similar outcomes in any specific case.