In the estate litigation world, we have unfortunately become quite familiar with this story:

Your parent offers to give you $100,000 as a gift to pay off your outstanding debt. Neither you or your parent thinks to document this gift or discuss the intent behind it because at the time, you don’t think this would ever be necessary. You don’t know if your sibling was the recipient of a similar gift, but don’t ask. Eventually your parent passes away and while you and your sibling are administering their Estate, your sibling comes across reference to the gift. Suddenly, this gift from your parent takes on a whole different meaning…

Regardless of the intention of the parent when the gift was made, this gift could be viewed through an entirely different lens years later. There could be allegations that the gift was actually a loan, meant to be repaid upon the death of the parent, or perhaps that the child coerced their parent into giving them this gift. Like with all issues surrounding estate litigation, the one person who can confirm the intent of the gift is no longer alive.

For this reason, it is a safe and practical idea to document gifts like this. By writing down things like the reason for the gift, the intention behind it, and whether it is meant to be repaid, this could help spare litigation down the road. Other ideas are to inform all children of the gift being made at the time it’s being made, or to discuss the gift with the solicitor that has drafted your will so that they can ensure the intention behind the gift is documented in writing.

We often see issues like this arise with jointly held accounts as well. Sometimes it is unclear if the parent’s intention was to have the child on the account simply to assist them with their finances in their old age, or if they wanted that child to inherit the account after they passed on. By documenting either intention, it leaves less up to interpretation when you’re no longer there to clarify.

While these may seem like unnecessary steps at the time, documenting everything in writing could save your family time, heartache and money in the future. 

Thanks for reading!

Darien Murray