If your child separates, money you "gave" them for a house is often treated as a gift and absorbed into the family-property split — but a documented loan can be repayable off the top before the assets divide. Canadian courts decide gift vs loan on evidence from the time of the transfer, which is why the paperwork matters before, not after.
It's one of the most common — and most painful — situations in Canadian family money: you helped your adult child buy a home, and now they're separating. Is that money a gift the couple splits, or yours to reclaim? The honest answer is "it depends," and what it depends on is something you may have already decided without realising it.
The starting point: gift or loan turns on your intention
When you transfer money to an adult child for nothing in return, the law has to decide what you meant by it. The leading authority in Canada is the Supreme Court of Canada's decision in Pecore v. Pecore. It is the leading Supreme Court of Canada authority on resulting trusts in the parent-child context, holding that the presumption of resulting trust is the general rule for gratuitous transfers from a parent to an adult child, with the burden on the child to rebut it by proving the parent genuinely intended a gift.
This matters because it flips what many people assume. Most parents giving a child a down payment think of it as obviously a gift. But the law's default is the opposite: the presumption of advancement does not apply to a transfer of money from a parent to an adult child; instead the presumption is one of resulting trust — that the adult child is obliged to repay the money to the parent — and that presumption may be rebutted by proof to the contrary, with the burden on the party seeking to rebut it.
Two competing presumptions
There are two legal starting points a court can use when intention isn't clear:
- Presumption of advancement — treats the transfer as an intended gift.
- Presumption of resulting trust — treats it as held in trust for you, i.e. repayable.
Since Pecore, the gift presumption no longer applies between a parent and an adult child. Gifts from parents to adult children are not presumed to be gifts; rather the presumption of a resulting trust applies. So, on paper, you start in a relatively strong position — the law presumes your son holds the money for you. The fight is over whether that presumption can be rebutted by evidence that you actually meant it as a gift.
What courts actually look at
Because everything turns on your intention at the time of the transfer, courts examine the surrounding facts. Canadian courts (originating in British Columbia's Locke v. Locke and applied widely since) weigh a well-known list of factors:
Read that list again with your own situation in mind. Every "no" — no document, no repayment terms, no security, no demand for repayment before the separation, no partial repayments — pushes a court toward finding a gift. That's the uncomfortable reality for parents who helped informally: the very informality that felt natural at the time becomes evidence it was a gift.
Real Canadian cases
The foundational case. Before Pecore, courts often applied the presumption of advancement when parents advanced money to an adult child, presuming the money was a gift unless there was clear evidence otherwise. Pecore reversed that default for adult children, making resulting trust the starting presumption. It also established that a court must focus on the transferor's actual intention at the time, using the presumptions only as a guide when that intention is unclear.
A father gave his son money toward the matrimonial home and more during the marriage; when the son separated, he claimed it was a loan owed back to the father. The Court of Appeal explained that a gift is a transfer in which the absence of an expectation of repayment tends to be reflected in the absence of security, recording, payments, or efforts to collect payments, whereas a loan often involves a formal, recorded transfer in which terms are set out and repayment is made or sought. The court ultimately treated the money as gifts, noting there were no promissory notes or other documents evidencing a loan, no repayment or terms of repayment, and no interest calculation. The lesson: without documentation, courts readily infer a gift.
A case showing how far back and how deep courts will dig. The court scrutinised evidence to determine the parents' intentions a full 37 years earlier, when they had advanced over $450,000 to their newly-married son plus half the cost of the couple's home. It confirms two things: the amount being large doesn't change the analysis, and the passage of many years doesn't put the question to rest — the court still tries to reconstruct your original intention from whatever evidence exists.
Why it matters in a divorce: the "equalization pot"
The gift-or-loan question isn't academic — it decides whether your money gets divided between the separating spouses. Under Ontario's Family Law Act, for example, the characterization is decisive: funds that are gifts to the couple during the marriage get put into the pot for equalization of Net Family Property, while funds considered loans must be repaid to the original lender. In plain terms: if it's a loan, it comes back to you off the top; if it's a gift to the couple, it can be shared with your child's spouse.
One more wrinkle worth knowing if you're in British Columbia: the rules there changed in May 2023. Since 2023, BC's Family Law Act (s. 81.1) bars both the presumption of advancement and the presumption of resulting trust in ownership disputes between spouses. The Pecore presumption still applies between a parent and child, so a parent's claim still starts from resulting trust. BC also treats a gift from a third party to one spouse — for example, a parent's gift to their own child — and property derived from it as that spouse's excluded property (s. 85), which matters if the gift was to your child alone rather than to the couple. This is a good illustration of why province-specific legal advice matters.
So — can you get it back?
Honestly: maybe, and it depends heavily on the evidence. You begin with the law's presumption in your favour (resulting trust). But if there is nothing in writing, no repayment was ever discussed or made, and you never asked for the money back until the marriage broke down, your son's spouse will argue — often persuasively — that you intended a gift. Courts are alert to the reality that a repayment claim can suddenly appear once a separation makes it convenient.
What can help your case: any contemporaneous evidence of loan intention — an email or text at the time calling it a loan, a note, a mention of repayment, evidence you treated it as repayable. What hurts: years of silence, no documentation, and a claim that only surfaces now.
- Don't destroy or "tidy up" any records — gather everything from the time of the transfer (bank records, emails, texts, anything mentioning the money).
- Avoid creating after-the-fact "loan documents" — backdating or manufacturing evidence can seriously backfire and damage credibility.
- See a family lawyer in your province promptly; the right strategy is fact-specific and time-sensitive.
The real lesson: document it before, not after
Every one of these cases turns on the same hinge — what could be proven about intention at the time. The parents who recover their money are almost always the ones who wrote it down: a clear, signed loan agreement, ideally with a repayment schedule and security registered against the property. The parents who don't are the ones who, understandably, kept it informal because it felt unkind to do otherwise.
If you're about to help a child buy a home, this is the moment to decide and record whether it's a gift or a loan. Our guides on whether to lend money to your child and family down payments: gift or loan walk through the decision, and how to write a family loan agreement shows how to put it in writing. If it's a loan, a written agreement is the single most powerful piece of evidence you can create — you can draft and sign one in a few minutes.
Giving a child money for a home? Put it in writing first
If it's a loan, record it clearly with a plain-language agreement you both sign — the documentation that protects you if things change later. Free to draft.
Create my loan agreement →Common questions
If I gave my child money for a house, can I get it back if they divorce?
It depends on whether a court finds the money was a gift or a loan, which turns on your intention when you advanced it. The law starts from a presumption that money from a parent to an adult child is not a gift, but evidence can rebut it. With no loan document, no repayment schedule and no repayments, a court may well find it was a gift.
What is the difference between the presumption of resulting trust and the presumption of advancement?
The presumption of advancement treats a transfer as an intended gift. The presumption of resulting trust treats it as held in trust for the giver (i.e. repayable). Since Pecore v. Pecore (2007), the presumption of advancement does not apply to transfers from a parent to an adult child — instead the resulting trust presumption applies, so the child must prove a gift was intended.
How can I protect money I give my child for a home?
Document it. If you intend a loan, put it in a written, signed loan agreement with a repayment schedule, and ideally register security against the property. If you intend a gift but want it protected from a future spouse, speak to a lawyer about a gift letter combined with a marriage or cohabitation agreement. The single biggest predictor of how a court will rule is the contemporaneous documentation.
Does it matter which province my child lives in?
Yes. Family-property rules are provincial. In Ontario, the matrimonial home's value is generally shared on separation even if a parent's gift paid for it. In BC, a parent's gift to one spouse is generally that spouse's excluded property, and the gift-or-loan presumptions don't apply between the spouses. A family lawyer in your child's province can tell you where you stand.
- Pecore v. Pecore, 2007 SCC 17 — Supreme Court of Canada
- Barber v. Magee, 2017 ONCA 558 (aff'g 2015 ONSC 8054) — Ontario Court of Appeal
- Chao v. Chao, 2017 ONCA 701 — Ontario Court of Appeal
- Locke v. Locke, 2000 BCSC 1300 — factors for gift vs loan
- Beaverstock v. Beaverstock, 2011 BCCA 413 — applying Pecore
- BC Family Law Act, s. 81.1 (in force May 11, 2023) and s. 85 (excluded property)
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 one involving significant money or an active separation — consult a family lawyer or licensed professional 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.