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'Wills vs Lifetime Gifts - Keeping Family Fairness'

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Wills vs Lifetime Gifts - Keeping Family Fairness

With the ever-increasing costs of living, the only way many young people can get their foot on the property ladder is by opening an account with ‘The Bank of Mum and Dad’. But what if one child receives more from their parents than their siblings? Head of Wills, Trusts and Probate at Dutton Gregory Solicitors, Emily Taylor, examines how protect family relationships after parents pass away.

If the parents can afford to make substantial gifts to their children this can be an efficient way of reducing future Inheritance Tax, particularly if they live for seven years after the date of the gift.

However, I have experienced issues when parents pass away having helped some children, but not others. Children who have not received a gifts of equivalent value to their siblings have felt aggrieved at not being treated equally and, in some cases, have successfully challenged their parent’s Will.

Challenging the Will

The basis of a claim would be under a legal principle called “the presumption against double portions”. The idea is that, in the absence of any evidence to the contrary, where a parent makes a substantial gift to a child during their lifetime and that child also benefits under their Will, the lifetime gift should be treated as an advance on the child’s inheritance and deducted from the estate before it is distributed.

However, the “presumption against double portions” is not as straightforward as might be assumed, and can only be determined after close examination of the facts of a given case.

An important case came to the Courts nearly 25 years ago and involved the payment of over £60,000 by a Mrs Cameron to help with school fees for her grandson. Mrs Cameron’s Will left her estate equally between her four children including the grandson’s father (Donald) although she had frequently said during her lifetime that she intended to treat her children equally. The Court decided that the gift of school fees should be treated as an advance on Donald’s inheritance.

In making its decision the Court cited a number of observations including:

  • the reasonable assumption that the parent did not intend to make the same gift twice to the same child.
  • the lifetime gift was intended to set the child up for its future and make substantial provision for them
  • evidence which showed that the parent did not intend to make two gifts to the child

What can be done? 

To avoid uncertainty and the possibility of a claim being made by a disappointed child, a Will needs to clearly state to what extent, if any, lifetime gifts made to a child before being named as a beneficiary are to be taken into account when reckoning their entitlement.

It is also sensible to keep a careful record of gifts (particularly those which are substantial) to children, along with the circumstances and reason why they have been made, as this can provide a useful record to avoid uncertainty particularly where a challenge is subsequently made.


For more information on LPAs or any other personal legal matter, visit www.duttongregory.co.uk or call 023 8022 1344