Real Property and the Presumption of Resulting Trust
At issue in the recent B.C.C.A. case of Fuller v. Fuller Estate was the deceased's gratuitous transfer of an undivided one-half joint interest in real property to a long-time friend five months before his death.
Because the transfer into joint ownership was gratuitous, the presumption of resulting trust was engaged. As set out in Pecore v. Pecore, the trial judge could only rely on the presumption of resulting trust if consideration of all of the evidence was insufficient to establish the deceased's actual intent at the time of the transfer.
The Court of Appeal reversed the trial judge's finding that the surviving joint owner held the property on a resulting trust for the estate of the deceased. Simply put, the finding that the transfer was made for “estate planning” purposes did not, on its own, invoke the presumption of resulting trust: "a gratuitous transfer to avoid probate fees or to make the transfer of property easier by way of an inter vivos gift does not detract from a transferor’s intention to give the right of survivorship."
Moreover, the evidence of the deceased's control over and management of the property until his death was found to be inadequate to support the trial judge’s inference that a gift was therefore not intended. The Court of Appeal's decision on this point is of particular interest:
"The real property in this case did not have the same fluidity or the same management requirements as the joint bank account in Pecore. Therefore, it was less susceptible to the spectrum of inferences than might be drawn as to the intent of a transferor of a joint interest in a bank account. While the value of Lot 17 may have changed over time, its physical attributes did not."
David M. Smith - Click here for more information on David Smith.
