What is the test for determining whether an advance made by a parent to a child is a gift or a loan?
British Columbia, Canada
The following excerpt is from T.S. v. M.S., 2011 BCSC 1715 (CanLII):
Counsel for the claimant refers to Locke v. Locke, 2000 BCSC 1300 at para. 20, where A.F. Wilson J. summarized a number of factors that have been considered in deciding whether advances made by parents to adult children should be found to be gifts or loans: 1. whether there were any contemporaneous documents evidencing a loan; 2. whether the manner for repayment is specified; 3. whether there is security held for the loan; 4. whether there are advances to one child and not others, or advances of unequal amounts to various children; 5. whether there has been any demand for payment before the separation of the parties; 6. whether there has been any partial repayment; and 7. whether they was any expectation, or likelihood, of repayment.
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