In Short:
- Presumption of Resulting Trust Upheld: In Brunton v. Lanzarotta et al., 2026 ONSC 4080, the court confirmed that a gratuitous real estate transfer to an adult child creates a presumption of resulting trust, shielding property from the child’s creditors.
- Creditor Claims Defeated: A creditor with a $1.79M civil fraud judgment against the daughter failed to seize joint properties because the surviving parent proved the transfer was for estate management, not a present gift.
- Warning on Missing Lawyer Notes: The court criticized the lawyers involved, calling their evidence “unreliable” due to a total lack of contemporaneous file notes, memos, or explicit estate reporting letters.
- Estate & Real Estate Disconnect: The ruling emphasizes the risks when real estate and estate planning solicitors operate in silos without any communication, coordination, or documented declarations of trust.
In a key decision on estate planning and asset protection, the Ontario Superior Court of Justice addressed the severe hazards of adding adult children to real estate title. In Brunton v. Lanzarotta et al., 2026 ONSC 4080, the court examined whether a third-party judgment creditor could seize real property jointly held by a parent and child and how a lack of legal documentation puts family assets at risk.
While adding a child as a joint owner is a common strategy to avoid probate fees, failure to document the true intention behind the transfer can lead to lengthy, expensive litigation when unexpected creditors or life events intervene.
Background of the Case
Between 2016 and 2017, Dr. James Brunton and his wife, Marilyn Brunton, added Marilyn’s adult daughter from her previous marriage, Janet Brunton, to the title of three of their properties: the Grand Harbour townhouse where they resided, their Toronto condominium where Janet resided, and a Collingwood condominium. Janet was also added to three bank accounts in Marilyn’s name.
On each land transfer, the Land Transfer Tax (LTT) affidavit stated, “Transfer from parents to themselves and their daughter for natural love and affection,” while the “in trust” box on the Parcel Register was left unchecked.
Dr. Brunton passed away in 2020. In 2023, A.J. Lanzarotta Wholesale Fruits and Vegetables Ltd. (“Lanzarotta”), the respondent, obtained a $1.79 million civil fraud judgment against Janet and moved under the Execution Act to seize and sell the three properties. Marilyn, now 79, applied to the court for a declaration that Janet held her title interest in a resulting trust and had no beneficial ownership for creditors to seize.
Legal Analysis and Judicial Findings
1. The Presumption of Resulting Trust and Burden of Proof
Under Pecore v. Pecore, 2007 SCC 17, a gratuitous transfer from a parent to an adult child automatically raises a presumption of resulting trust. Therefore, the party asserting a gift—in this case, Lanzarotta—bears the burden of proving the parents intended an immediate beneficial gift.
The creditor argued that the language of “natural love and affection” in the LTT and the unchecked trust box indicated that it was an absolute gift. The court rejected this argument, accepting Marilyn’s testimony that the sole purpose was survivorship and probate avoidance so Janet “could just take over” the assets if both parents died. The creditor failed to rebut the presumption, leaving Marilyn with 100% beneficial ownership.
2. Judicial Scrutiny of Lawyers’ Files and “Evidence of Habit”
Although Marilyn won, the court issued a sharp critique of the legal services provided. Neither Edward Olkovich, who drew up the wills of the couple, nor Maureen Galea, who handled the real estate transfers, had contemporaneous file notes or intake memos.
The court ruled the lawyers’ evidence “unreliable” due to the lack of notes and the “effluxion of time.” Ms. Galea tried to rely on “evidence of habit,” that she generally explained to her clients that the phrase “natural love and affection” meant a gift. Citing R. v. Pilon, 2009 ONCA 248, the court rejected the “evidence of habit” argument, reasoning that a lawyer providing proper trust advice should have memorialized it in writing to protect themselves from negligence claims.
3. Disconnect Between Real Estate and Estate Planning Files
The court highlighted a major breakdown of communications between the legal disciplines: Mr. Olkovich executed the Bruntons’ wills just two days after Ms. Galea put Janet on title to the Collingwood condo, yet neither lawyer seemed to know what the other was doing.
Key Observations
• Creditors Cannot Seize Resulting Trust Assets: Creditors of an adult child cannot claim real estate held by the child in a resulting trust.
• Importance of Documentary Evidence: In this case, Marilyn only won because the judge found her personally credible. Had she passed away or lacked capacity, the absence of lawyers’ notes would have proved fatal to the case.
• Joint Ownership Risks: Placing children on title exposes primary assets to the child’s personal risks, including divorce, bankruptcy, and litigation.
Conclusion
Brunton v. Lanzarotta, 2026 ONSC 4080, serves as a firm warning: informal, rushed title changes made in minutes can trigger multi-million-dollar litigation later. Clear written declarations, detailed file notes, and active communication between the real estate and estate planning lawyers are essential to protecting family assets.
Essential Takeaways
For Property Owners:
Never add a child to a title without drafting a formal Declaration of Trust establishing that they hold bare legal title only.
For Lawyers:
• Document Instructions: Record whether transfers represent a present gift or bare legal title.
• File Memos & Letters: Draft same-day memos and outline trust advice explicitly in reporting letters.
• Communication & Coordination: Always coordinate with estate planning counsel when altering property ownership.
How an Experienced Wills & Estates Lawyer Protects Your Rights
- Comprehensive Title & Estate Audits: We review real estate titles, joint tenancies, and estate plans to identify hidden risks and protect your assets from third-party claims.Â
- Declarations of Trust & Co-Ownership Agreements: We draft clear legal instruments—such as declarations of trust and co-ownership contracts—to document your true intentions, whether avoiding probate or making a gift.
- Strategic Estate Planning: We craft custom wills, powers of attorney, and trust structures to seamlessly align your property holdings with your long-term legacy.
- Estate & Trust Litigation: Our litigators offer strong courtroom representation in resulting trust claims, creditor disputes, and property ownership conflicts.
Whether structuring an estate plan, protecting family property, or litigating trust disputes, our Wills & Estates team ensures your true intentions are legally secured with rock-solid documentation.Â
Safeguard your assets. Contact our Wills & Estates team today to schedule a confidential consultation and secure your legal interests with confidence.
