Transferring Property To Family? Documentation Is A Must

Handing down property to a child? Gifting the family cabin to your sibling? Property is often transferred between family members, and formal documentation can seem unnecessary. However, failure to document transactions can have costly consequences, especially when someone dies without a will.

In a recent B.C. Supreme Court decision, Dhanda (Re), 2026 BCSC 819, the Court grappled with the surprisingly complex consequences of an undocumented property transfer. In Dhanda, a mother, Gian, had transferred a long-time family property to her son, Mike. Four years later, Mike died without a will. The property was likely his most valuable asset.

As Mike did not have a will, the Wills, Estates and Succession Act provides that his estate would pass to his widow, Tiena, and his two sons, with nothing going to his mother, Gian. However, Gian started a lawsuit claiming that Mike held the property in trust for her and that therefore it did not form part of the estate. Neither Gian nor Mike documented the property transfer and, of course, Mike was no longer available to lend any insight into the matter.

One might expect Mike’s sons to side with Mike’s widow, Tiena, as they stood to benefit should the property remain part of the estate. However, the Court was told of an agreement (the terms of which were not disclosed to the Court) between Gian and Mike’s sons, leading the sons to support Gian’s claim of a resulting trust over the house. The existence of the trust was therefore contested by only Tiena.

Dhanda itself did not decide on the merits of Gian’s trust claim. Instead, it dealt with an application to remove and discharge the administrator of the estate, Ms. Fast, and replace her with Tiena. Ms. Fast presented accounts of approximately $120,000 that needed to be paid. Were the property not part of the estate, there may not be sufficient assets in the estate to pay Ms. Fast’s accounts.

All parties agreed that Ms. Fast should be discharged as the administrator, and that Tiena be appointed. However, Ms. Fast could not be discharged without provision being made for her accounts.

This left the parties, in the words of the judge, “locked in a Gordian knot of litigation.” As there may be a very low value in Mike’s estate, Ms. Fast sought an order that one or more of the parties be personally responsible for her accounts. Tiena submitted that both the property and the liability for the accounts should remain with the estate, while Gian and Mike’s sons submitted that they should not be liable for the accounts as they sought to establish that the property never passed to the estate.

The Court’s solution to cutting this Gordian knot was to order that all parties were jointly personally responsible for Ms. Fast’s fees and disbursements.

This solution might not leave any of the parties happy, but the Court held it was appropriate to ensure Ms. Fast’s fees secured. Despite Gian’s lack of interest in the estate, holding her personally liable for the accounts was justified as she was “primarily responsible” for the legal mess. Had she documented the property transfer, uncertainty over the intention of the transfer, and therefore the contents of Mike’s estate, could have been avoided, along with extensive legal fees for what should have been a straightforward application.

Dhanda is a cautionary tale: failing to document a property transfer can create dramatic legal complexity. Proper estate planning is crucial to avoid unnecessary costs and litigation.

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