BC Lawyer- Loan or Gift From Mom/ Dad To Newly Weds

Trevor Todd and Jackson Todd have over sixty years combined experience in handling contested estates including whether monies advanced from parents to a child and his/her spouse  is a gift or a loan


I previously wrote on the “bank of mom and dad” and how they had an almost %100 failed collection rate when the wedding “gift” suddenly turns into a loan after the  marriage fails.


Whether the advancement of funds from one party to another is a loan or a gift is a common theme in estate litigation and more so when it involves families and money.


The courts have more frequently than not found that the out of luck parents intended a gift when the monies were advanced and not a loan.


Typically since it is family, the details are not documented and signed . The parents attitude is often that it is a gift so long s the marriage holds and if not, we want our money back.


In Zucker v Zucker 2022 BCSC 2025 the parents did the usual thing of advancing monies to a child and his spouse for them to buy a home. There was a mortgage and a signed promissory note.

The child of the parents agreed with them at trial that the monies were advanced as a loan but the spouse argued that it was a gift.

Based on some unique evidence the court held that the parents intended a loan.


At para. 43, the court noted that in Kuo v. Chu, 2009 BCCA 405 (B.C. C.A.) at para. 9, the Court of Appeal adopted the following factors from Locke v. Locke, 2000 BCSC 1300 (B.C. S.C.), as applicable to the question of whether a loan or a gift was intended:

(a) Whether there were any contemporaneous documents evidencing a loan;

(b) Whether the manner for repayment is specified;

(c) Whether there is security held for the loan;

(d) Whether there are advances to one child and not others, or advances of unequal amounts to various children;

(e) Whether there has been any demand for payment before the separation of the parties;

(f) Whether there has been any partial repayment; and,

(g) Whether there was any expectation, or likelihood, of repayment.
The court firstly attempted to determine the actual intention of the transferors on the balance of probabilities.
The court starts with the presumption of a resulting trust, and weighs the evidence in an attempt to ascertain the transferors actual intention .
The presumption of resulting trust only applies where there is insufficient evidence to rebut it on a balance of probabilities ( Pecore v Pecore 2007 SCC 44.
Since the inquiry focuses on the intention of the transferors the state of knowledge of the opposing spouse about the transaction is not determinative ( Tobias v Tobias 2016 BCSC 125 at 42)
The court seized on the unusual fact that the defendants at one point transferred the title to one of the parents finding that such an act was persuasive reliable circumstantial evidence that the plaintiffs did not intend the monies to be a gift.
The defendants also partially repaid the monies and a partial repayment can be evidence that a loan was intended.  Kuo v Cho 2009 BCCA 405 at para.9
The court found that the defendants were liable to the plaintiffs on the basis of a resulting trust.

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