When family money is disputed, courts look at the evidence of intention at the time the money moved — and between parents and adult children, the law presumes the money wasn't a gift, so the child has to prove it was. The same applies to siblings and other adult relatives; only money given to a minor child is presumed to be a gift. Contemporaneous records (texts, e-transfer notes, any repayments) can win the money back; a signed agreement would have settled it before it started.
You helped a relative with money you both understood would be repaid. Now they're calling it a gift, and you're left wondering whether you have any right to it back. Often you do: when money goes to an adult relative, Canadian law presumes it wasn't a gift, so they have to prove it was. The hard part is proving what was meant.
Where family loans start in law: the resulting trust
Since the Supreme Court of Canada's decision in Pecore v. Pecore, the presumption of advancement — the old assumption that a parent's money is a gift — applies only to transfers to a minor child. For a transfer to an adult child, a presumption of resulting trust applies instead: the money is presumed to be held for the giver, not given away, and the burden falls on the recipient to prove that a gift was actually intended.
So if you're a parent who advanced money to an adult child, you don't start out having to prove it was a loan. The law presumes it wasn't a gift, and your child has to prove otherwise. And this isn't special to parents: the same starting point applies whether you lent to an adult child, a sibling, a cousin or a friend. The only exception is money given to a minor child, which is presumed to be a gift.
The foundational authority. It confined the old gift presumption to minor children — gifts from parents to adult children are not presumed; rather the presumption of resulting trust applies. Crucially, the court must ultimately determine the transferor's actual intention at the time of the transfer, using the presumption only as a starting point and weighing all the evidence on a balance of probabilities.
It always comes back to intention
Presumptions are just the starting line. What a court is really trying to find is what you intended when you handed over the money. As the Supreme Court put it, the governing consideration in these gratuitous-transfer cases is the transferor's actual intention; the trial judge begins with the applicable presumption, then weighs all the evidence to ascertain, on a balance of probabilities, what the giver actually intended.
That means even your favourable starting presumption can be rebutted if the evidence shows you really did mean it as a gift — and, conversely, it can be reinforced by evidence that you always treated it as repayable.
What courts weigh
Courts apply the same practical factors used across gift-versus-loan cases (originating in Locke v. Locke):
- Any documents evidencing a loan;
- Whether a repayment method was specified;
- Whether security was taken;
- Whether advances were unequal between children, or to one child only;
- Whether repayment was demanded before any falling-out;
- Whether there has been any partial repayment; and
- Whether repayment was expected or likely.
For a family lender, the helpful facts are the same as anywhere: a record of the advance, any message about paying it back, any partial repayments, and the fact that you treated it as a debt over time rather than only claiming it once a relationship cooled.
A Supreme Court decision on money disputes in personal relationships and unjust enrichment. It explains that "donative intent" — an intention to gift — is one of the reasons a court might let the recipient keep money, and that a resulting trust is fundamentally about the claimant asking for their own property back. It shapes how courts analyse money advanced without a formal contract.
The Ontario Court of Appeal reaffirmed that the onus is on the recipient to establish, on a balance of probabilities, that the transferor intended a gift. The case was about a former couple's contributions to a home rather than a family loan, but it's a recent confirmation that, in the resulting-trust situation, the person claiming the gift carries the burden.
The added difficulty in families: it's personal
Family disputes carry weight friends' don't. Often the money was advanced informally precisely because it was family — no document, no awkward terms, just trust. That informality, which felt natural, is exactly what the other side now leans on to argue "gift." And when these fights happen around an estate (for example, after a parent dies and siblings disagree about whether money to one child was a loan or a gift), courts will scrutinise the evidence carefully — a degree of "healthy scepticism" applies — though still on the ordinary civil standard, not a criminal one.
So, can you recover it?
If you lent to an adult child — or to a sibling or other adult relative — you begin with the resulting-trust presumption in your favour, which is a genuine advantage. In every case, though, the court's real question is what you intended at the time, and the presumption only decides it when the evidence is evenly balanced. Either way, the outcome is decided on what can be shown — so the strength of your records matters enormously. A calm written demand for repayment is a sensible first step; small claims court (up to provincial limits, e.g. $50,000 in Ontario) is the usual venue for amounts within range; larger or estate-related disputes need a lawyer.
- Gather everything from the time of the advance — bank records, e-transfers, texts, emails.
- Note any partial repayments or any time you asked for the money back.
- Don't fabricate or backdate documents — it backfires badly.
- For a significant sum or anything touching an estate, get legal advice in your province.
Common questions
If I lent a family member money and they say it was a gift, can I get it back?
Often, yes. When money goes to an adult for nothing in return — an adult child, a sibling or another relative — Canadian law presumes it wasn't a gift, so the person who received it must prove a gift was intended. With nothing in writing, though, it becomes a question of evidence, so records of the advance and any talk of repayment are decisive.
Does the law assume money from family is a gift?
Only for a minor child. Since Pecore v. Pecore (2007), the presumption of advancement — that a parent's transfer is a gift — applies only to minor children. For an adult child or any other adult, a presumption of resulting trust applies: the money is presumed not to be a gift, and the recipient must prove otherwise. The court ultimately looks for the giver's actual intention at the time.
How do I prove a family loan was a loan, not a gift?
Collect contemporaneous evidence: bank or e-transfer records of the advance, any messages mentioning repayment or a date, any partial repayments, and any demand for repayment made before the relationship soured. Courts weigh whether repayment was expected and whether documents or terms existed. A signed written loan agreement is the strongest proof and removes the dispute, which is why it's worth doing even within a family.
The lesson: write it down, even with family
Every one of these disputes traces back to the same root — the loan existed only in memory, and memories diverge once feelings sour. A short written agreement saying it's a loan, the amount, and the repayment terms would have ended the argument before it began. It can feel cold to ask a relative to sign something, but it's the opposite: it's what keeps a disagreement about money from becoming a permanent family rift.
If you're lending within your family now — or want to formalise an existing arrangement going forward — putting it in writing is the cleanest protection. Our guides on protecting yourself when lending to family, why a family loan must be in writing (real cases), and what to do when family won't pay back a loan go deeper — and you can draft a clear agreement in a few minutes.
Keep family money from becoming a family dispute
Put the loan in writing in a few minutes — the amount, the repayment, both signatures from your phones. The record that settles any "it was a gift" claim before it starts. Free to draft.
Create my loan agreement →- Pecore v. Pecore, 2007 SCC 17 — Supreme Court of Canada
- Kerr v. Baranow, 2011 SCC 10 — Supreme Court of Canada
- MacIntyre v. Winter, 2021 ONCA 516 — Ontario Court of Appeal
- Locke v. Locke, 2000 BCSC 1300 — gift vs loan factors
This article is general information about Canadian law, not legal advice, and LendRight is not a law firm. Laws differ by province and change over time. For your specific situation — especially a large sum or an estate dispute — consult a lawyer in your province.
We write plain-language guides on lending between family and friends in Canada, reviewed against current provincial and CRA rules. LendRight is not a law firm — this is general information, not legal advice.