Resulting Trust in Ontario Family Law: Is a Parent's Transfer a Gift or Held in Trust?

Parents often transfer money or assets to their adult children — to help with a home purchase, to support a new family, or simply as an expression of generosity. When the marriage later breaks down, a question arises that can carry enormous financial consequences: was that transfer a gift, or does the parent retain an ownership interest? The answer turns on one thing above all else — what the parent intended at the time of the transfer.

The Legal Framework

A resulting trust arises when one person transfers property or money to another without receiving anything in return. Ontario law presumes that the recipient holds the asset on trust for the person who transferred it — unless there is sufficient evidence that a gift was intended.

This presumption is not limited to real property. It applies equally to money moved into a bank account, funds advanced to assist with a purchase, investments, and any other gratuitous transfer of value. Wherever a parent transfers an asset to an adult child without consideration, the same analysis applies.

The leading authority is Pecore v. Pecore, 2007 SCC 17, where the Supreme Court of Canada confirmed that the presumption of resulting trust applies to gratuitous transfers from parents to adult children. The central question is always the same: what did the person who made the transfer actually intend at the moment the transfer was made?

It is important to understand that it is the transferor’s intention — the parent who provided the money or asset — that matters. What the recipient did with the money afterwards, or what the recipient believed about the arrangement, is relevant only to the extent it sheds light on what the transferor intended at the time. Later changes of mind, or characterizations made in the context of litigation, carry little weight.

What the Ontario Cases Tell Us

Ontario courts have reached different conclusions depending on the facts. Three cases illustrate the range of outcomes and the kinds of evidence that make the difference.

Pecore v. Pecore

2007 SCC 17 — Supreme Court of Canada

The Supreme Court confirmed that the presumption of resulting trust applies to gratuitous transfers from parents to adult children — whether the transfer involves real property, funds in a bank account, or any other asset. The presumption can be rebutted on a balance of probabilities by evidence of the transferor’s intention at the time of the transfer. The onus is on the party seeking to show that a gift was intended.

Chao v. Chao

2017 ONCA 701 — Ontario Court of Appeal

Following a long marriage, a husband claimed that substantial advances from his parents — including funds used to purchase the matrimonial home — were held in resulting trust and should therefore be excluded from equalization. The Court of Appeal upheld the trial judge’s finding that the advances were gifts. There were no contemporaneous documents evidencing a trust, no repayment terms, no demand for return during the marriage, and the transfers back to the parents coincided with the parties’ separation.

Balkisson v. Sandy

2025 ONSC 856 — Ontario Superior Court of Justice

A mother funded the purchase of a home in her son’s name and later claimed a resulting trust. The court found the presumption rebutted. The mother’s own words and conduct at the time of the transfer — including her description of the funds as a gift — and her behaviour in the years that followed were entirely consistent with a gift having been intended. The court emphasized that the transferor’s intention at the time of the transfer is the governing consideration, and that contemporaneous evidence carries the most weight.

What these cases share is a common theme: the outcome is determined by what actually happened when the money or asset changed hands, and how the parties conducted themselves in the years that followed. Documents prepared at the time of the transfer, tax filings, and the parties’ day-to-day conduct often tell a clearer story than anything said in court years later.

A word of caution on the matrimonial home

Resulting trust and the matrimonial-home rule are sometimes confused, but they are separate questions. A resulting trust is about ownership: if the money is genuinely held in trust for the parent, it belongs to the parent and never forms part of the spouse’s net family property — regardless of where it ended up, including the matrimonial home. The matrimonial-home rule is different. It applies to a gift or inheritance the spouse owns: once that excluded property is used to acquire or improve a matrimonial home, its excluded status under the Family Law Act is lost. So a parent’s funds put toward the matrimonial home are only caught by that rule if they were a gift to the spouse — not if they are genuinely held in resulting trust for the parent.

How I Approach a Resulting Trust Claim

These cases are rarely straightforward. Whether the transfer involved real property, a bank account, or funds advanced for a specific purpose, the analysis always begins in the same place: what did the person who made the transfer actually intend at the moment they made it?

My approach is to meet with clients and examine all of their documents and evidence carefully before forming any view. That means looking at the original transfer records, any contemporaneous communications, tax filings, banking records, and how all parties conducted themselves in the years between the transfer and the separation. The evidence that matters most is almost always the evidence that exists closest in time to the transfer itself.

Once I have a complete picture, I give clients a frank overall assessment: the strengths and weaknesses of their position, the realistic range of outcomes, and the costs and risks of litigation versus settlement. The client then makes an informed decision about how to proceed — whether that means negotiating a settlement or commencing court proceedings. No step is taken without the client’s knowledge and instructions.

For families with cross-border ties, the same principles apply to transfers made from abroad — but the evidence often lives in another language and another banking system. As a lawyer licensed in both Ontario and China, I regularly trace and document parental advances made through Chinese banks and family arrangements, so that the intention behind a transfer can be properly established before an Ontario court.

Key Takeaways

If you have questions about a resulting trust claim, about property division on marriage breakdown, or about the effect of a parental transfer on equalization of net family property, you are welcome to arrange a consultation to review your documents and discuss your options.