In British Columbia, individuals often take steps to move assets outside of their estate during their lifetime as part of their estate plan. There are various reasons why this is done: to ensure their wishes are fulfilled, to avoid potential wills variations claims, to minimize probate fees, or to seek more preferential tax outcomes for their families. There are several ways people can move assets outside of their estates – including through the making of gifts during their lifetimes, called inter-vivos gifts.
But what happens when someone has made a gift of a significant asset and later changes their mind? Can a demand be made that a gift be returned?
This issue was recently considered by the B.C. Supreme Court in Satguru Ram Singh Satsang Charitable Foundation v. Akalirai, 2026 BCSC 717 (“Satguru”).
Background
In 2018, Ms. Akalirai executed a deed of gift transferring her interest in her Vancouver home to the Satguru Ram Singh Satsang Charitable Foundation (the “Foundation”), a registered charity and society. The Foundation was associated with a temple of which Ms. Akalirai was a frequent attendee. Under the terms of the transfer, Ms. Akalirai retained the right to reside in her home for her lifetime. She was 86 years old at the time of the transfer.
In 2019, Ms. Akalirai received a charitable donation receipt in the amount of $1,625,000.
In 2021, Ms. Akalirai requested that the Foundation return the interest in the property to her.
The Foundation brought a petition to the B.C. Supreme Court seeking declarations from the Court regarding whether there was any legal basis for return of the property.
The evidence before the Court consisted primarily of affidavit evidence which gave conflicting versions of events.
Ms. Akalirai alleged that the donation was made under duress and the gift was invalid. She claimed that though she felt a spiritual need to donate, she had been pressured into the transfer by her son-in-law, whom she alleged had close ties to the Foundation. She gave evidence that she was emotionally vulnerable at the time, struggling following the murder of her grandson, and that she did not fully understand the legal implications of the documents she signed.
The evidence of the other witnesses sharply contradicted her account.
Ms. Akalirai’s daughter gave evidence that her husband (who had passed away prior to the petition) had no involvement in Ms. Akalirai’s financial or legal affairs and no involvement in the decision to donate the property. He was not affiliated with the Foundation and attended a different temple altogether.
The Director of the Foundation at the relevant time also gave evidence that Ms. Akalirai herself initiated discussions regarding donating her home and that he encouraged her to carefully consider the decision and obtain independent legal advice before proceeding. Independent legal advice was ultimately obtained, and the lawyer who advised Ms. Akalirai provided a certificate confirming the same.
Inter Vivos Gifts and Duress
To establish a valid inter vivos gift:
- The donor must have an intention to donate – intention must be present at the time of the transfer;
- The donee must accept the gift; and
- There must be sufficient delivery of the gift by the donor to the donee.
A donor must possess the legal capacity to make the gift. The capacity required to make an inter vivos gift is generally less stringent than that for testamentary capacity. A valid gift must also be free from duress and undue influence. I’ve written recently on undue influence – here.
Allegations of duress must be proven by the party asserting them. As stated by the Court in Satguru “(d)uress normally involves a threat of an unlawful or illegal action made to compel the innocent party to enter the contract”; it involves coercion that ‘vitiates’ consent.
Once a gift is completed (and is not invalid, including for the reasons above) it is final and cannot be retracted, nor can a donor later dictate how the property is to be used. A donor may only retain the ability to later alter the terms of a gift or impose future directions if those rights are expressly reserved at the time the gift is made.
In other words, a donor cannot later change the terms of the gift or seek its return simply because they regret their decision.
Application to the Case
The Court preferred the evidence of Ms. Akalirai’s daughter and the Director of the Foundation.
Ms. Akalirai failed to establish that she had made the gift of her home to the Foundation under duress. While Ms. Akalirai regretted her decision to gift her home, regret alone was insufficient to invalidate an otherwise valid inter vivos gift. The Foundation was under no obligation to return the property.
Takeaways
This decision serves as an important reminder that a validly completed inter vivos gift is irrevocable.
Individuals considering transferring significant assets as gifts during their lifetime — particularly real property — should carefully consider the legal consequences before doing so. Once the essential elements of a gift are satisfied (and absent duress, undue influence, lack of capacity etc, or expressly reserved rights) a donor will not be permitted to later reclaim the property or change the terms, simply because they have changed their mind or their circumstances have changed.