Estate Litigation and Employment lawyer Reshma Kishnani's article "Whoops! Forgot to register transfer of title prior to death" was published in The Lawyer's Daily. The article discusses whether legal title to real property can transfer after the transfer is executed but before it is registered looking at the recent decision in Alberta of Chan v. Chan, (2022) ABQB 256.
The article was originally published on August 22, 2022. To read it in The Lawyer's Daily, part of LexisNexis Canada Inc., visit: https://www.thelawyersdaily.ca/articles/39046/whoops-forgot-to-register-transfer-of-title-prior-to-death (subscription required).
Whoops! Forgot to register transfer of title prior to death
Chan v. Chan, (2022) ABQB 256, is a case in which the
issue raised was whether legal title to real property can transfer
after the transfer is executed but before it is registered. Justice
Grant S. Dunlop of the Court of Queen's Bench of Alberta ruled
it does not.
The court noted that while someone may have an equitable interest
in the property after a transfer is executed but not registered, it
does not transfer legal title or ownership of the property to them.
In this case, a mother (now deceased), executed a transfer of her
legal title to her property to her adult son for no consideration,
seven months prior to her death. The transfer was not registered on
title prior to the deceased's death. The deceased's son
caused to register the transfer document after the deceased's
death, stating that neither he nor his mother knew the transfer was
to be registered. Justice Dunlop noted in the decision that he
informed the respondent son that: "Everyone is bound by the
law, whether they know what the law is or not."
The daughters of the deceased brought an application for a
declaration that the deceased's property formed part of her
estate. The court granted the application for the simple reason
that the transfer executed by the deceased did not transfer
ownership of the property to her son while it remained
unregistered. The Land Titles Act, RSC 2000, c. L-4, s.53,
similar in Ontario, requires the transfer to be
registered. Justice Dunlop acknowledged that the
deceased's son may have had an equitable interest in the
property after the transfer was executed by the deceased, but it
was not possible to determine the same on the record before the
court and consideration of the totality of the circumstances was
required, including with respect to issues of capacity, undue
influence and resulting trust.
The decision highlights the importance of ensuring that if a
testator truly intended to transfer their real property to their
adult child for no or minimal consideration, prior to their death
and contrary to any expressed wishes in their will, it is essential
for those intentions to be acted upon in accordance with applicable
laws (ie: if the transfer document was executed it should have been
registered on title at the time with a notation on the transfer
that it was intended to be a gift) and clearly documented in
writing by the testator or the testator's lawyer.
In light of the fact that the transfer was executed for no
consideration without any indication on the transfer document that
it was intended to be a gift or other evidence of the same, if the
transfer had been registered on title, the deceased's son would
still have had the onus of displacing the presumption of resulting
trust with respect to the property. This is an issue that often
arises in estate litigation matters which requires the analysis of
a testator's intentions and the circumstances surrounding the
transfer of property by a parent to their adult child. Absent
documentary evidence of the parent's intentions, the
evidentiary threshold for rebutting the presumption of a resulting
trust can be quite high.
It is unclear on the face of this decision whether the deceased and
her son obtained any legal advice prior to executing the transfer
document. It would be reasonable to expect that if counsel were
retained by the deceased and it was truly her intention to transfer
legal title of her property to her adult son prior to her death as
a gift, the transfer would have been registered on title, the
lawyer would have confirmed the deceased's intentions with
respect to the gift and made notes about her capacity to give such
instructions, if applicable.
It is recommended that testators seek legal advice when making a
transfer of their property, either into joint or absolute
ownership, with an adult child or children for no or minimal
consideration, to ensure their intentions are documented clearly
and to avoid potential costly litigation.
Re-printed with permission from The Lawyer's Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc. - originally published on August 22, 2022.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.