Duhaime's Law Dictionary


Presumption of Advancement Definition:

A presumption in trust, contract and family law which suggests that property transferred from a parent to a child, or spouse to spouse, is a gift and would defeat any presumption of a resulting trust.

Related Terms: Joint Tenancy

In Pecore, the Supreme Court wrote:

"Historically, the presumption of advancement has been applied in two situations.  The first is where the transferor is a husband and the transferee is his wife.  The second is where the transferor is a father and the transferee is his child."

In Re Levy, the Nova Scotia Supreme Court used these words:

"The presumption of advancement ... is the presumption of law that a spouse who purchases property and puts it in the other spouse's name or voluntarily transfers property to the marriage partner intends to make a gift and it is for the spouse making the transfer to the other spouse to prove there was no such intention.

"The presumption is based on the concept that where a property is transferred to a person to whom the transferor has an obligation to support, it is presumed to be an advance of the interest the dependent might reasonably expect to receive on the death of the transferor."

A presumption of advancement applies in regards to any purchase of property made in the name of the child or spouse of the puchaser.

The term has important application in family and estate law as it can significantly affect the determination and division of assets as between spouses or beneficiaries.

Lewin on Trusts, written in 1964, under the heading "presumption of advancment on purchases in the name of a child, wife or near relation" states:

"Where a (parent) purchases real or personal property in the name of his child, he is presumed to do so by way of advancement.

"The presumption of a resulting trust which would have arisen if the purchase had been made in the name of a stranger is rebutted and the property is presumed to be a gift.

"The presumption of advancement can, of course, be rebutted by evidence that no gift was intended....

"In the absence of evidence to the contrary, property bought by a husband in the sole name of his wife or intended wife is presumed to be a gift to her."

However, as far as Canada is concerned, the following words of Justice Rothstein in Pecore are significant:

"(G)iven that a principal justification for the presumption of advancement is parental obligation to support their dependent children, it seems to me that the presumption should not apply in respect of independent adult children.  Parental support obligations under provincial and federal statutes normally end when the child is no longer considered by law to be a minor.  Indeed, not only do child support obligations end when a child is no longer dependent, but often the reverse is true: an obligation may be imposed on independent adult children to support their parents in accordance with need and ability to pay....

"... it is common nowadays for ageing parents to transfer their assets into joint accounts with their adult children in order to have that child assist them in managing their financial affairs.

"There should therefore be a rebuttable presumption  that the adult child is holding the property in trust for the ageing parent to facilitate the free and efficient management of that parent’s affairs.

"... the rebuttable presumption of advancement with regard to gratuitous transfers from parent to child should be preserved but be limited in application to transfers by mothers and fathers to minor children."

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