Presumption of Advancement

The presumption of advancement is a legal principle in trusts and property law that applies when one person gratuitously transfers property to another, typically in a familial or close relationship. The presumption operates on the assumption that the transferor intended to benefit the transferee by making a gift, advancing them in some way. As a result, the transferee is presumed to hold the property beneficially, meaning they own it outright.

Gift intention: The presumption is based on the idea that when a person transfers property to a close family member or someone in a relationship implying trust and confidence, the natural presumption is that the transferor intended to make a gift.

Close relationships: The presumption commonly arises in relationships such as between spouses, parent and child, or engaged couples. It reflects societal expectations and traditional views about familial support and financial assistance.

Rebuttable presumption: While the presumption initially places the burden on the person challenging it to prove that the transfer was not a gift, it is a rebuttable presumption. This means that evidence to the contrary can be introduced to show that the transfer was not intended as a gift.

Effect on resulting trusts: The presumption of advancement is distinct from resulting trusts. In a resulting trust, the law presumes that the transferee holds the property on trust for the transferor or for a specific purpose. The presumption of advancement operates in the opposite direction, presuming an outright gift.

In short, the presumption of advancement generally applies in the context of property and financial transactions within families. It presumes that when a person made a substantial transfer of property to a spouse or a child, it is presumed to be a gift rather than a loan or other transaction.