Posted by Darryl Aarbo — filed in Wills and Estates Law
Advances of money from parent to child before death without proper documentation is one of the leading causes of disputes after the death of a parent. When parents give their children money they rarely take the time to document the transaction or the intent behind the transaction. That is usually fine while they are both alive but when the parent dies then the siblings often take a different view of the money given to one of them and not the others.
Estate law has complicated principles of presumptions to assist the Court in deciding was it a loan or a gift. There are the presumptions of resulting trust and advancement. There is a presumption that an advance from a parent to minor child is a gift and an advance from a parent to adult child is presumed to be a loan. These presumptions have to be read in light of s.11 of the Evidence Act, which requires corroboration in estate litigation. These principles create the perfect storm that lead litigation.
Who would have thought giving your kids money was so complicated? The parents may know what their intent was, but when they die and all their children look at the transaction, they often consider the only fair thing to do is ensure the money gets paid back, no matter the intent.
By Darryl Aarbo of Aarbo Fuldauer LLP
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