The Superior Court of Justice of Ontario rendered an inter vivos gift invalid in a Wills and Estate case. The case involved two stepdaughters and a deceased stepfather’s estate with a will dated August 2012. The applicant requested the court to reverse the transfer of $400,000 to her sister, on the premise of it being invalid.
Estate planning is complex but navigating the nuances of inter vivos gift is even more challenging, often leading to troubles, even for well-intentioned people. This is why consulting a wills and estate lawyer is always advised when preparing a will or any other relevant legal documents.
Case Background
The applicant in this case disputed the validity of a transferring $400,000 transfer from the deceased stepfather’s estate to his stepdaughter’s personal account prior to his death. The respondent, the stepdaughter who received the sum in question, claimed that her stepfather, before his passing, had expressed his desire to gift this amount to her. However, this was challenged by the applicant who is also a stepdaughter and a beneficiary of the will.
According to her, the necessary legal steps to complete this gift transfer were not fulfilled before their stepfather’s death. Notably, the respondent had also been appointed as an estate trustee and previously held powers of attorney for property and personal care for the deceased, making the case more complex. Thus, the Court was tasked to determine the legality of that transfer of money and whether the respondent had the legal authority to complete the transfer.
The Case Timeline
The late stepfather passed away in December 2022. The respondent alleged that in early September 2022, the man requested her to arrange a meeting with his investment advisor from IG Wealth Management. This meeting was arranged to fulfil the agenda of transferring $400,000 as a gift to respondent. However, it was later revealed that during this meeting, no specific instructions or amount of the Gift were discussed.
On November 2, 2022, the stepfather met with his lawyer to further discuss the details of the Gift. Shortly after this meeting, the man’s lawyer emailed the respondent to inform her that he would prepare a ‘gift letter’ which the settlor then signed on November 30, 2022. However, the letter (the legal document) did not have any specific mention of an amount to be transferred.
On December 22, 2022, after receiving the ‘Gift Letter’, the investment advisor from IG Wealth suggested that the respondent should meet with her stepfather to obtain explicit instructions about the gift. This meeting never occurred as he passed away on December 26, 2022. When cross-examined, the respondent admitted her uncertainty about her stepfather’s intention regarding the Gift or a transfer of money.
What is an Intervivos gift?
If anyone transfers their property or assets to you while they are alive, then it is known as an inter vivos gift. This is opposite to testamentary transfer as it takes in affect after the demise of the gift giver.
What are the criteria to satisfy an intervivos gift?
There are 3 conditions that must be met by the settlor or donor to make inter vivos gift legally valid. These are as follows –
- Intention to make a gift
- Acceptance of the gift
- Delivery if the gift
Court’s Decision and Rationale
In Hugginson v. Hugginson, the court found these elements lacking, particularly the donor’s explicit intention and the actual delivery of the gift. Despite the respondent’s claims, there was insufficient evidence that her stepfather had forever surrendered the control over the $400,000 before his demise.
This decision also leaned on historical legal case law of Strong v. Bird and Morton v. Brighouse, which clarify the conditions under which an incomplete gift can be considered complete. In the end, the court ordered the respondent to return the $400,000 to the estate —subject to probate court oversight.
Tips for Estate Planning
The Hugginson case underscores the importance of thorough and precise estate planning. Here are a few practical takeaways:
- Document Everything: Any intentions for gifting has to be clearly documented to be upheld in court of law, preferably with the help of a legal professional.
- Consult with Professionals: The expertise of Wills and estate lawyers is invaluable when avoiding common pitfalls like those witnessed in the Hugginson case.
- Understand the Law: It’s important to familiarize yourself with key estate planning principles—like powers of attorney, legal authority, and the correct use of legal documents—to prevent disputes and ensure your wishes are honoured.
How can our Wills and Estate Lawyer Help you?
The Hugginson v. Hugginson case is more than a legal battle between family members; it is a sad reminder of the complexities of estate planning. It highlights the critical need for clarity, documentation, and professional legal advice in managing one’s affairs.
Whether planning your estate or navigating the aftermath of a loved one’s passing, consulting an experienced and knowledgeable wills and estate lawyer can make all the difference. Call our Wills and Estate lawyer at 905-405-0199 today!
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