If there is a disagreement when a loved one passes away this may focus on their Will but, frequently, concerns are raised over gifts given during their lifetime. This may arise when someone has transferred or gifted their most valuable asset to one person during their lifetime or where they have made substantial gifts to someone that give rise to concern.
Depending on the circumstances and nature of that ‘gift’ there may be grounds for challenge. A number of these grounds for challenge may exist whilst someone is still alive, but it is often the case that the gifts only come to light after their death.
As a general rule, a person has the right to gift their money or property, including houses, stocks, shares, and or other high-value assets to whomever they wish.
Of course, lifetime gifts are frequently made for legitimate reasons. This may be out of genuine love and affection, to see the recipient enjoy the gift, or for legitimate tax planning purposes.
Often those gifts which are called into question are those which are perceived to be of ‘disproportionate size’ or to remove the majority of the value of the person’s estate. Other lifetime transactions that may raise eyebrows include loans made on favourable terms or where a gift does not appear to reflect the wishes or best interests of the person making the transfer/gift.
In particular, gifts may be called into question if there are concerns that the person making the gift lacked the mental capacity to do so at the time the gift was made or that they had been somehow coerced or unduly influenced into making the gift itself.
Those concerns may be more prevalent in circumstances where an attorney or Deputy was appointed to act on behalf of the deceased.
If there is a genuine concern about a lifetime gift or transfer it will be necessary to look at all the circumstances and consider whether there is a reasonable basis for bringing a challenge. This could include
- Lack of mental capacity: broadly, the donor (the person who made the gift) must have understood the nature and effect of that gift. If you have suspicions that the donor’s judgement was impaired by a condition such as dementia, the gift may be invalid.
- Where the donor was under undue influence (Undue Influence and the need to prove coercion | Howes Percival);
- Where the gift was made as a direct or indirect result of illegal or fraudulent activity;
- Where the disposition is made to seemingly avoid a claim being made on the estate such as under the Inheritance (Provision for Family and Dependants) Act 1975 to avoid a claim for reasonable provision for a potential applicant (Claims under the Inheritance (Provision for Family and Dependants) Act 1975 | Howes Percival).
- A breach of trust: if there are questions over whether the person who made the gift was holding this on trust for a third party ie it was not their asset to gift.
- If the gift was made to someone owing fiduciary duties to the deceased e.g. someone with a power of attorney makes a gift to themselves.
Challenging a lifetime gift can be a complex process that likely requires legal expertise. You will need to establish the grounds for challenge and this may include a thorough investigatory process of gathering evidence, such as financial records, witness statements, medical records and other correspondence, that support the claim.
Depending on when the gift was made, challenging may also be time sensitive and you should seek legal advice as soon as possible.
Our specialist Contentious Trusts and Probate team are here to help if you are concerned about lifetime gifts made by a deceased. We frequently advise both beneficiaries and personal representatives and have a wealth of experience in working to resolve issues.
For more information, please contact our Contentious Trusts and Probate Team here.
The information on this site about legal matters is provided as a general guide only. Although we try to ensure that all of the information on this site is accurate and up to date, this cannot be guaranteed. The information on this site should not be relied upon or construed as constituting legal advice and Howes Percival LLP disclaims liability in relation to its use. You should seek appropriate legal advice before taking or refraining from taking any action.
To contact us, please fill out this form and we will get back in touch as soon as possible. Your personal data will be processed in accordance with our privacy policy which can be found here.
Thank you for your enquiry. We will respond as soon as possible.
