Family of BC Senior with Dementia Sues Alleged Financial Predator

Predatory marriage is a form of elder abuse that is on the rise. In addition to being conned into marriage by opportunistic predators, vulnerable seniors are taken advantage of in other ways. They may be convinced to change their Will, sign a power of attorney, or add the new partner’s name to a joint bank account. In other cases, the elderly person may buy real property for their new partner. If the validity of such a “gift” is called into question, there are several legal options to challenge it. However, as was seen in Gosselin v. Ramsay, 2019 BCSC 1394, the fact that the property was gifted to a “less than loving” or financially motivated partner does not automatically invalidate the gift. Donative intent and mental capacity at the time of the transfer are the key factors.

Family suspicious of younger girlfriend’s motives

A lonely, depressed BC widower (“Roland”) met a younger, unemployed woman (“Darlene”) in the summer of 2013. They became intimate by the fall of that year, much to the dismay of Roland’s daughter (“Tanya”) who did not approve of the relationship. Roland and Tanya had little to no contact over the next few years as a result, leaving Roland more dependent on Darlene for companionship and support. Throughout his life, Roland had accumulated a sizeable estate. In the summer of 2015, while in the early stages of Alzheimer’s disease, Roland bought a $350,000 home in Chase, BC for Darlene and her unemployed adult son (“Tavun”). Almost immediately after the property transfer was complete, Darlene ended the romantic relationship with Roland. Within months, Roland descended into full-blown dementia. Tanya sued on her father’s behalf to recover the property. When the trial took place, Roland was 73 years old, residing in an extended care facility, and incapable of tending to his own needs, financially and physically. He was unable to participate in the trial or provide evidence on his own behalf.

Allegations of impropriety and elder abuse

Tanya alleged that the property transfer came about as a result of Darlene and Tavun’s exercise of undue influence over Roland. Tanya also alleged the acquisition of the property was conditional on Darlene and Tavun providing Roland accommodation at the property with them, together with the provision by them of care and medical oversight once Roland was unable to maintain his own home in Kamloops due to his declining medical situation. Darlene said she was living with Roland, but neighbours testified that Darlene was only there occasionally. The geriatric nurse who went to Roland’s home found it to be in serious disarray, with nothing indicating the presence of another person living with Roland or overseeing his care.

Gift was the product of full, free and informed thought

While Gosselin v. Ramsay may seem like a straightforward example of a financial predator taking advantage of a vulnerable senior, a “meticulous examination of the facts” suggested otherwise. The BC court was satisfied that Roland intended the property to be a gift to Darlene and Tavun and found that Roland was, at all material times, capable of forming the necessary donative intent. Although some of Darlene’s motives regarding her relationship with Roland were likely self-interested, that was insufficient to undermine the court’s conclusion that Roland’s decision to gift the home was the product of his “full, free and informed thought.”

Examination of the facts

• In the two years leading up to the property purchase, Roland and Darlene spent a lot of time together and had a close, affectionate relationship. Roland was heavily reliant upon Darlene for companionship and intimacy. Tanya made clear to Roland that he would have to keep Darlene separate from Tanya and her family.
• In early 2015, Roland was required to surrender his driver’s license due to the onset of dementia, which created a greater dependency by Roland on Darlene and Tavun, who took him to medical appointments, etc.
• Roland’s stated intention to the realtor was to gift a house to Darlene and Tavun because they were “there for him” and they had “stepped up to the plate.” In other words, to recognize the help they had already provided. There was no evidence to support Tanya’s allegation that there was a contractual arrangement that the home was given in exchange for Darlene and Tavun providing Roland with care or accommodation in the future.
• Just before the purchase was finalized, Roland’s brother persuaded Roland—over Roland’s objections—to reshape the purchase such that Roland had a legal and beneficial interest in 1/3^rd of the property and a mortgage covering the remainder of the purchase price of the other two-thirds. Roland had the benefit of independent legal advice. The lawyer inquired into Roland’s capacity and noted that Roland understood the consequences of the transaction.
• Roland demonstrated his ongoing donative intent when he altered his Will in July 2015 so as to provide for a transfer of his 1/3^rd interest in the property to Darlene and Tavun upon his death together with the discharge of the mortgages payable. A different lawyer assisted with the preparation of this Will and testified to Roland’s intent, capacity, and understanding of the consequences.
• Roland demonstrated donative intent in September 2015 when he attended at the offices of another lawyer, instructing him to gratuitously transfer Roland’s interest in the property to Darlene and Tavun and discharge the mortgage. The stated consideration was “one dollar and natural love and affection.” The lawyer made all proper inquiries and was satisfied that Roland was acting independently, understood the nature of the transaction, and gave a plausible explanation for why he was doing it knowing, as he did, that it would upset his relatives. The transfer was signed in October 2015, thereby removing Roland from title and making Darlene and Tavun the outright owners of the property.
• Tanya found out about the property transfer in November 2015 and took Roland to another lawyer. Roland again stated that the property transfer was “all him-it was something he wanted to do for Darlene and Tavun” and he recognized “that it may have put other relatives’ noses out of joint.”

Intent and mental capacity when the property was transferred

The critical time for determining legal capacity and donative intent is as at the date of the transfer. The evidence satisfied the court that Roland had the necessary capacity and donative intent in September and October of 2015 when he “completed” his gift (that is, when he transferred his interest in the property to the Darlene and Tavun and forgave the debt created by the mortgage). Events leading up to and following the transfer, outlined above, were admissible to the extent that they were relevant to the intention of the transferor at the time of the transfer.

While his short-term memory was failing, the collective effect of the medical assessments from doctors made at the relevant time established that Roland had the necessary cognitive ability to make informed decisions about his finances. According to the notes made by the various lawyers who assisted him throughout that time, he was able to speak very clearly and answered questions directly. They were satisfied of his mental capacity. Although Roland descended rapidly into full-blown dementia over the course of the last weeks of December 2015, Roland had the necessary cognitive ability to transfer his interest in the property in September and October of 2015.

Dependence, but no undue influence

The relationship between Darlene and Roland was of the type that gives rise to the presumption of undue influence. At the time of the transfer, Roland was heavily dependent upon both Darlene and Tavun for companionship and assistance given his diminishing ability to meet the needs of independent living. The final question for the court was whether Roland’s donative intent formed as a result of the dominant relationship as between Darlene and himself. Circumstances suggested financial motives in terms of Darlene’s ongoing relationship with Roland, including the almost instant demise of their romantic relationship once the home had been transferred into the name of Darlene and Tavun and the mortgage discharged. She was, at the very least, motivated by more than just affection towards Roland in terms of the relationship they engaged in. That being so, Roland’s statements to neutral third parties who assisted him make clear that the gift came about not as a result of any pressure exerted by Darlene or Tavun but rather from Roland’s view that both had assisted him during his time of need when his family had essentially abandoned him, and that he was financially able to bestow something of value upon them, while still providing for his daughters in his Will.

Bottom line on elder abuse and financial predators

Where an elderly person brings both the legal capacity and free will to bear upon the decision to make a gift, the character or motivations of the recipient—or the disapproval of family members—is not enough on its own to invalidate the gift. Each case is unique, and a careful examination of the circumstances will be necessary. If you have concerns that you, a family member, or a friend is being taken advantage of by a financial predator, it is important to get legal advice. Contact Onyx Law Group’s team of Vancouver family law and estate litigation lawyers for a 30-minute free consultation.