If there are suspicions transfers during the deceased’s lifetime, these can be scrutinized and investigated after the death of the deceased. A personal representative ought to consider whether any large transfers should to be challenged, on the basis that a gift was not intended, or that the transfer is otherwise invalid (i.e. due to undue influence, lack of capacity).

In Schwab Estate v. Warriner 2023 BCSC 220, the deceased died from a fentanyl overdose at the age of 47. He had two children, aged 11 and 9. The deceased did not leave a will.

There was a dispute as to whether the defendant was living in a marriage-like relationship such that she was a “spouse” of the deceased. If she was a spouse, she would get a share of the estate under an intestacy. If she was not a spouse, then the children would get the entirety of the estate. It was held that the defendant was not a spouse. This is a highly fact-specific inquiry. I discuss the issue of consideration of spousal status in other posts, for example here.

The second issue in Schwab Estate related to a transfer of $350,000 from the deceased to the defendant four days before his death. The deceased sold his home five weeks before he died, received $800,000 from the sale, and provided a $350,000 bank draft to the defendant.

The defendant argued that the deceased owed her money, and the $350,000 draft was to pay her back. She said that the deceased owed her money for being the primary bread-winner for the years they were together. She gave evidence that there was an agreement between her and the deceased about the approximate amount of the debt and what he was to repay to her.

The court rejected this claim. The Court did not accept the defendant’s testimony, and the documents (in particular bank records) did not assist with her position. There was no evidence of an agreement to pay, and there was no evidence that the amount that would have been payable was $350,000. The Court relied upon the testimony of a witness who described a conversation which suggested that the deceased did not consider that he owed the defendant any money. The bank records also showed that the deceased attended to payment of other debts that he discussed with other parties (including a debt to his drug dealer).

As a result, the transfer was gratuitous and the presumption of resulting trust applied. The defendant failed to establish that the deceased intended to gift her the funds. The evidence was that the deceased intended to gift the funds, potentially with the deceased’s brother. There was also evidence that the deceased intended to shield the monies from the mother of his children.

The Court also held that the transfer was procured by undue influence. The deceased did not transfer the $350,000 of his own full, free and informed thought. The deceased was vulnerable as a result of his ongoing drug addiction, health condition, and paranoia about the mother of his children.

The funds had been spent without an accounting, and so they could not be simply returned. Instead, the court awarded the deceased’s estate damages in the amount of $350,000. The Court also awarded punitive damages in the amount of $50,000, for using her position for her own profit, and spending all of the money with no accounting.