“A resulting trust arises by operation of law. When a parent gratuitously transfers property to an adult child, the law presumes the child holds the property on a resulting trust for the parent. The presumption exists from an equity perspective because equity presumes bargains, not gifts.
In Kerr v. Baranow, the Supreme Court of Canada confirmed the view expressed in Pecore that where there is a gratuitous transfer, the actual intention of the transferor is the governing consideration. In a gratuitous transfer between parent and adult child, the burden of rebutting the presumption is on the child, who must produce evidence to establish, on a balance of probabilities, that the transferor intended a gift at the time of the transfer. In cases where a spouse of a transferee wishes to establish a beneficial interest in the transfer, the onus is on that spouse to establish a beneficial interest in the gratuitous transfer.
To rebut the presumption it must be shown that the transferor intended to transfer the beneficial interest to the transferee. The intention is a question of fact to be determined on the whole of the evidence. Evidence of intention may include such factors as the relevant conduct of the transferor and transferee, and control and use of the transferred property after transfer.”