Lawrence Estate (Part I): When is a gift a gift?
The Nova Scotia Supreme Court recently heard a case that involved a gift from a parent to an adult child in Lawrence Estate v. Lawrence, 2025 NSSC 369 (CanLII).
Since the Supreme Court of Canada decision in Pecore v. Pecore, 2007 SCC 17, a transfer of property from a parent to an adult child without payment has been presumed to create a resulting trust, rather than a gift. This means that the child presumably holds the property in trust for the benefit of the parent or their estate – even if the child is a joint owner.
But that presumption is only the default position.
If the parent intended to make a gift, then the property belongs to the child.
In the Lawrence Estate case, the mother of four children added her adopted son, Elton, to the deed to the family Homestead. Elton was the youngest of the four siblings and was the only one that grew up at the Homestead. His mother wanted it to stay in the family.
After her death, all four children signed an agreement stating that all assets would be liquidated and divided four ways.
It was only after they signed this agreement that the children learned that Elton was a joint owner of the Homestead.
Since he was a joint owner with right of survivorship, the property passed to him automatically on his mother’s death. The question was whether his mother intended the property to be a gift to Elton, in which case he would own it outright, or whether the presumption of a resulting trust applied, in which case he held the property on a resulting trust for the estate.
The Court heard evidence from all of the children and a number of other witnesses, including the lawyer that drafted the Deed adding Elton to the property. The Court was convinced that the mother:
- was concerned that the other three children would sell the Homestead;
- wanted Elton to have it because he would likely keep the Homestead in the family; and
- wanted to make sure that Elton got the Homestead.
The Court also noted that Elton was the only child to grow up at the Homestead and would therefore be more likely to keep it, that he planned to move home some day in the future, and that he had the most frequent and regular contact with his mother.
The Court was satisfied that all of the evidence showed an intention to give the property to Elton, rebutting the legal presumption that the property was held on a resulting trust for the estate.
But that was not the end of the story. The Court needed to consider the impact of the agreement between the heirs and whether that agreement applied to the Homestead. That point will be discussed in Part II of this piece.
This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact the author, Tipper McEwan. Tipper is a partner in Stewart McKelvey’s advocacy group who practices in the areas of estate litigation, insurance, and commercial litigation.