Can you challenge a lifetime gift by a deceased loved one?

If someone gives away all or most of their money, or a substantial proportion of their wealth whilst they are alive, those gifts can be challenged after they die, provided certain criteria are met. 

Many individuals chose to give away their wealth during their lifetime, whether to assist their children in getting on the property ladder or to lower their estate's value for inheritance tax purposes. However, there are situations where the executor of an estate can question whether a gift made before the donor’s death was unusual, excessive, or out of character.

Concerns may arise about gifts if:

• the person giving the gift lacked mental capacity before their death;
• they made the gift without professional advice from a solicitor or accountant; or
• an attorney, acting under a Lasting Power of Attorney, facilitated a substantial gift beyond their authority without the approval of the Court of Protection.

If you suspect a gift was inappropriate, or if the deceased’s estate is significantly smaller than anticipated due to a suspected gift, you may have grounds to contest it based on undue influence, fraud or lack of metal capacity.

How to allege undue influence?

If you think that someone has been persuaded into giving a gift, against their will, you may be able to challenge the gift on the basis that undue influence and pressure was applied to the gift-giver.

When alleging undue influence, you typically need to prove that there was some element of coercion by the recipient of the gift, which can be quite difficult. However, the law provides that in certain relationships where there is a level of dependency and trust such as a parent and child, there is a presumption of undue influence if the gift is a substantial one (such as a property). In such circumstances, the recipient of the gift must prove they did not exploit the trust placed in them.

How to bring a challenge to capacity?

The common law standard for assessing capacity to make a lifetime gift was established by the courts some time ago, in the case of Re Beaney [1978] 1 WLR 770.

The law says that the donor of the gift must have a strong understanding of the gift’s nature, implications and consequences in order for it to be held valid. If they did not, then the gift can be challenged. 

Challenging lifetime gifts

If your inheritance has been diminished because your loved one has given their money away during their lifetime, you may well be able to mount a challenge.

You should seek legal advice as quickly as possible, and our experienced team here at Samuels Solicitors would be pleased to assist you. If you bring a successful challenge to money given away by an elderly relative, this could result in the return of the asset or funds to the estate, allowing them to be distributed according to the will or intestacy laws, which could mean that your inheritance is restored.

If you contact us today, you can speak to one of our experienced lawyers about your case, and find out what you can do.