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Is it a Gift or a Loan?

When determining whether you or your spouse received gift or a loan from a third party, the court will look at the surrounding factors, such as whether there are actions or documents to support either position.

A few examples of actions or supporting documentation that might support the position of gift are:

  • the lack of evidence of a loan,
  • if there is no demand made for repayment,
  • the demand made for repayment was only made after application/separation,
  • the little likelihood of repayment,
  • no mention of a loan in financial statements or prenuptial agreement,
  • no witnesses to say that it was a loan, and,
  • upon death, a Will found stating loans are to be forgiven (as if loan had never been made).

Actions or supporting documentation that would be considered to possibly support the position of a loan might include:

  • the execution of a promissory note,
  • proof of full knowledge of its existence among the parties,
  • evidence of attempt to repay,
  • examples of past loans paid, and,
  • upon death, a Will found stating that loans are NOT to be forgiven.

Contact us anytime at SMP Law to help SiMPlify your legal matter at 905-565-9494 or email info@smplaw.ca if you have any questions or would like to book an appointment to meet and discuss your situation and how we can help.

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