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    Property Transfer Disputes

    Understanding the ramifications of a property transfer

    Property transfer

    In 2011, Marian Hertendy, as sole owner of her house in Smiths Falls, drafted a Will which left the house to her daughter, Beverly Ann Gault. In 2012, Marian transferred her ownership interest in the property to Beverly for nothing in return. This property transfer was done on the basis that Marian would retain a life interest in the property, and that Beverly and her husband would help pay for on-going expenses.

    In 2017, after a falling out, Marian removed Beverly from her Will and brought a claim against Beverly, seeking a declaration that Beverly held the property on a resulting trust. Marian’s claim was based on, among other things, the following arguments:

    1. She did not know the legal effect of the transfer;
    2. The lawyer who signed the transfer was not acting for Marian, but rather, was acting for Beverly;
    3. She did not receive independent legal advice;
    4. The transfer occurred while Beverly was her attorney for property;
    5. She was depressed when the transfer was complete; and
    6. She was on heavy pain medication following her knee surgery.

    The Court confirmed that, “an adult child who received a gratuitous transfer of assets from her parent bore the burden of rebutting the presumption of a resulting trust by showing on a balance of probabilities that a gift was intended.”  Simply, it was up to Beverly to prove that, at the time of the transfer, Marian intended to transfer the property to her as a gift.

    In the above case, Hertendy v Gault, the Court found that Marian, in transferring the property, intended it as a gift because:

    1. She signed the transfer document;
    2. She intended to sign the document;
    3. She received a benefit from signing the document; and
    4. She paid the lawyer for the transfer.

    Marian’s claim was dismissed, and the transfer was upheld. Regardless of her Will, when Marian dies, Beverly will get the house.

    While we listed some of the factors the Court will look at in the case of a property transfer dispute, it is not an exhaustive list, and one single factor will not be determinative. The question of whether a gift was intended will be a very fact-specific question and the Court will balance all the evidence. A property transfer can be beneficial, in certain circumstances, but you must make sure that you fully understand the ramifications of doing so. If you plan to transfer property as part of your estate plan or if you have a property transfer dispute, contact our Estate Litigation Team at Merovitz Potechin LLP.

    The content on this website is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship. If you would like to discuss your specific legal needs with us, please contact our office at 613-563-7544 and one of our lawyers will be happy to assist you.

    Aaron King

    Posted By: Aaron King of Merovitz Potechin LLP

    Associate

    Aaron King is a litigation associate at Merovitz Potechin LLP practicing in the areas of commercial and civil litigation, estate litigation, mortgage enforcement and other debt collection.

    Aaron enjoys the intricacies and challenges of litigation and approaches each unique case attentively and thoroughly. He focuses on how he can help his clients in the most effective ways, understanding that litigation is rarely an ideal situation.

    Aaron has always had an interest in law and knew early on he wanted to become a lawyer. Prior to law school, Aaron attended Carleton University where he graduated with a Bachelor of Arts (Honours) with a focus on Legal Studies.

    During law school, Aaron focused on litigation and took on a variety of challenges in different areas of law. Aaron participated in two international competitive moots – The Willem C. Vis moot, an international commercial law and arbitration moot in Vienna, Austria, and the Philip C. Jessup moot, a public international law moot in Washington D.C. Aaron continues to give back to the moot program at the University of Ottawa, most recently coaching the Wilson Moot team.

    Coming from a criminal law background, Aaron has a lot of experience advocating for his clients in the Courtroom with various trial and motion appearances. He recognizes, however, that many disputes can be resolved before going to court and focuses on alternative methods to resolving various issues efficiently and effectively before resorting to trial.

    Outside of the office, Aaron enjoys spending time with his family, playing soccer, and drinking coffee.

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