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As part of their estate plan, people often elect to give inter-vivos (before death) gifts to their loved ones to minimize probate fees and to allow loved ones to enjoy their inheritance earlier. Some testators may not be aware that there are a number of cases where an inter-vivos gift can be deemed invalid and voided. For gifts of real estate, the gift can be considered imperfect if it was not officially registered with the Land Title and Survey Authority of BC, making the gift void. Another reason for a gift being invalid could be when it contradicts public policy. If a person makes a gift to an organization that practices hate towards protected groups or is related to criminal activity, it is likely against public policy and a legally void gift.
One of the more rare reasons for an inter-vivos gift being voidable is due to the doctrine of unconscionable procurement. This is similar to when a person is mentally incapable of writing a will. When someone does not fully understand what they are doing when making an inter-vivos gift, the doctrine of unconscionable procurement can be relied on to make the gift voidable – where the courts make it as if the gift had never been given. The doctrine of unconscionable procurement is a doctrine of equity meant to protect gift-givers from being taken advantage of.
The doctrine of unconscionable procurement is designed to prevent acts of undue influence where a gift was arranged by its receiver, and the gift was not reflective of the gift giver’s intentions. When this arises, the person giving the gift is typically not fully aware what is happening or does not understand the nature of the transaction. It’s important to make the distinction that a successful unconscionable procurement claim doesn’t make the gift void, it simply means the gift is voidable.
In order to have a successful unconscionable procurement claim, there are two primary elements that must be found:
When a scenario satisfies these criteria, it creates the presumption that there were suspicious circumstances and that the gift-giver may have not have fully understood what what they were doing by giving the gift. When the criteria are satisfied, the onus is on the defendant to prove, on a balance of probabilities, that the gift was not unconscionably procured. In order to have a legal intention to make a gift, the gift-giver must appreciate the nature and consequences of the gift.
In the case of Gefen v. Gaertner (2019), a handful of gifts were voidable under the doctrine of unconscionable procurement. The deceased mother had elected to give more than 50% of her estate in inter-vivos gifts to one of her three children. The two children decided to challenge the transactions under the doctrine of unconscionable procurement. As described in the case, unconscionable procurement requires that a “person who obtains a benefit from another by voluntary donation must establish that the donor did so voluntarily and deliberately, knowing what they were doing.” The two children were able to successfully prove the two elements of unconscionable procurement, showing that their mother did not make these gifts voluntary and deliberately.
While not always the case, it is common for elderly people to give gifts that have been unconscionably procured. If the recipient of the gift is overly involved and pushing to receive a gift, this could be grounds for an unconscionable procurement claim.
If you or a loved one have been wronged through an unconscionably procured gift, contact an experienced estate lawyer today. We will help to ensure that you receive the inheritance you’re entitled to, even if that means making the gift voidable.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.