Do Will Beneficiaries Claiming to Have been Wronged Have an Interest in Land?

The transfer of property from a parent to an adult child gives rise to a rebuttable presumption that the child holds the property in trust for the parent. If the parent dies and the child sells the property, using the proceeds to purchase another property, can sibling beneficiaries under the parent’s will obtain and order for the issuance a certificate of pending litigation (CPL) against the new property? An Ontario court says yes.

In Jordan v. Jordan, the Superior Court of Justice was asked to grant leave to certain siblings to issue a CPL over property owned by another sibling that he purchased with proceeds of two properties transferred to him by the mother before her death. One property was purchased for nominal consideration and the other allegedly far below market value. The siblings’ claim appears to be that the child holds the property as trustee for the mother’s estate as traceable proceeds of the maligned transfers. The issue on the CPL motion was whether the moving siblings had claimed a sufficient interest in the property to permit a CPL to issue. The siblings argued that they did not need to show a claim to an interest themselves in the property. Because there is a rebuttable presumption of a trust for the benefit of the parent and an allegation of dependence by the parent on the child, they argued such should be sufficient to show that title to the original property was at issue and therefore that a CPL should issue.

While not giving significant analysis to the issue, the court accepted this position while relying on other factors as well, including a finding that no third party would be prejudiced by the issuance of a CPL. However the concept is interesting as the court seems to have accepted the principle that a party does not need to claim a direct interest in property (or perhaps more properly the proceeds that purchased the property) but need only show that beneficial title is in issue by way of the presumption of trust. I would venture that the siblings, as beneficiaries of the parent’s will, did have a claim to an interest in the property/proceeds but that does not seem to have been the deciding factor for the judge.

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