An elderly mother of four adult children struck big in June 2021 winning $3,000,000 from the Lotto 6/49 draw. Six months later she passed away and now the kids are heading to court arguing for a portion of the prize.

According to the lawsuit filed April 11, mom gifted approximately $500,000 to her son Matthew and $500,000 to her daughter Lisa to help with financing the home mom shared with Lisa and Lisa’s husband. The remainder of the winnings were deposited into bank account held jointly with Lisa.

For bank accounts or properties that are held jointly (i.e. in more than one person’s name and specified as joint holders) often there is a “right of survivorship” for the owner still living. This would mean the balance of the lotto winnings and potentially the property may automatically go to Lisa leaving nothing from the winnings for her other children.

However, there is also a presumption of “resulting trust” where a parent gratuitously transfers property/bank account to an adult child; this means that legally an account may transfer in name but the adult child actually holds that property or account funds in trust for the estate of the deceased. If there is a resulting trust, the property/account funds get returned to the deceased’s estate and then distributed according to the will or the Wills, Estates, Succession Act.

What this all means is that if there is little documentation, there will be a lot of questions over these lottery winnings, particularly if mom’s estate does not have much else in it. Many of the cases that end up in litigation are because of gifts late in life and transfers where it is not clear to all of the family members what the intention of a parent was.

Here are three tips to help your family avoid this stressful and costly situation:

1. Create a will: preparing a will with a lawyer can bring clarity to the distribution of your estate and your passing, saving your family members time and legal fees to sort our discrepancies after the fact. Lawyers can also document wishes in relation to property that may have transferred as part of your estate planning to ensure it is treated how you want it to be treated.
2. Obtain a medical test for capacity: depending on your age, it can be advantageous to obtain confirmation from your family physician regarding your capacity prior to preparing a will or entering into any other large transactions. This will make it more difficult to challenge the intentions set out in your will or other documents. Although “capacity” is a legal test and not a medical one, it can be helpful supporting evidence to have.
3. Document, document, document: after you have passed away, your family and the court may be left trying to piece together your wishes. While alive, it is important to make your wishes known and clear. That means documenting things like if you gift $500,000 to one child, your reasons and intent for doing so. This is particularly the case if you wish to disinherit a child. In BC, anyone who qualifies as a child or spouse has the right to apply to the court to vary your will for failure to provide adequately for that person.

Need help?

RDM has lawyers who can provide legal guidance on estate planning and prepare wills and trust documents to protect your wishes for your assets and your family. We also have lawyers who are experienced at navigating the court system if you find yourself in a situation where there are questions over the validity of a will or there is disagreement about how assets are meant to be treated.

You can reach out to our Wills and Estate Planning Team or Estate Litigation Team by calling our office at 604.853.0774 to request a consult today.

*Feature photo: Lotto Max tickets by Handout/Western Canada Lottery Corporation