Promise or Gift Before Death
Can a gift made before death be challenged?
The general rule with lifetime gifts is similar to the longstanding principle of testamentary freedom as applies to gifts left in a Will – a person is free to gift their money or property to whoever they wish.
Concerns about the legitimacy of significant lifetime gifts arise on similar grounds to inheritance disputes focusing on a Will.
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Can a gift made before death be challenged?
It sometimes happens that a person makes a significant gift prior to their death. A beneficiary who receives less, or nothing, as a result, may want to challenge the gift.
There are a number of ways to challenge a gift made before death, including:
If a person was not of sound mind when making the gift, the gift can be challenged. Evidence will need to be produced to show this, and we can advise you on exactly what you will need and how to obtain it.
If a person made the gift as a result of undue influence, coercion or pressure from another, then the gift can be challenged and an application made to court to set aside the gift.
Undue influence can take a number of forms. In some cases, it may be actual, for example by making a threat that care or support may be withdrawn. A presumption of undue influence may arise out of a relationship between two persons where one has acquired influence over another and there is a transaction that calls for an explanation. For example, where the elderly have placed their trust and confidence in the other party in relation to the management of their financial affairs.
Again evidence will be needed, and we can advise you on exactly what you will need and how to obtain it.
Attorney acting outside of powers
Lasting Power of Attorneys came into force in 2007. There are two types, property and financial affairs and health and welfare. The most common is property and financial affairs.
The Office of Public Guardian has the function of directing visits by the Court of Protection visitor, requiring accounts and other reports, investigating complaints and reporting to the Court of Protection. It also has investigatory and safeguarding powers. For example, if an attorney made a significant gift on the donor’s behalf without obtaining approval of the Court of Protection.
There are instances where a person has power of attorney over another and makes gifts. Attorneys only have the power to make small gifts to charity or birthday or seasonal gifts of a similar value to those made by the person concerned when they had capacity. If more substantial gifts are made, without the approval of the court, they can be challenged.
Sometimes the most trusted, such as relatives added to bank accounts or those trusted with bank debit cards, can be guilty of financial abuse of the elderly and vulnerable leading to misappropriation of funds.
Is a promise or a gift made before death enforceable?
Disputes can arise after a person's death if a Will does not reflect a promise made by the deceased before their death (such as a promise to transfer land or property). It may be possible to enforce a promise that is not subsequently fulfilled in a Will.
In some cases, a promise made by a person before death can be enforceable, even if that promise is not provided for in a Will. This is known legally as “proprietary estoppel”. These cases are usually factually complex.
Proprietary estoppel is an equitable remedy and requires the claimant to show:
- An unambiguous promise by words or conduct.
- Reliance on that promise to the claimant's detriment.
- That it would be unjust or inequitable to allow the other party to go back on the promise.
There are other remedies available that include constructive trust and resulting trust claims.
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Frequently asked questions
Each person’s circumstances are different and therefore the choice as to whether an individual chooses to share their Will with family members, or close friends, is theirs.
Before the Grant of Probate is issued, only the executors named in the Will are entitled to read the Will. An executor may decide to send a copy of the Will to family members or close friends and allow them to read its contents, and usually, there is little reason not to disclose the contents of a Will. However an executor does not have to do this. No other person (including a beneficiary) has a legal right to see a copy of the Will.
After the Grant of Probate has been issued, the Will becomes a public document. The Gov.uk website allows any individual to search for and purchase a copy of a probate record (a Will or Grant of Probate).
If an individual has passed away within the last six months and a Grant of Probate has not yet been extracted, a ‘standing search’ can be made. A standing search allows an individual to lodge their request for a copy of the Grant of Probate before it has been extracted. Instead of regularly searching the online records (as above), the Probate Registry will send a copy of the probate records once they are available.
A gift left in a Will is called a legacy. If you want to leave a particular gift or item to someone then this is called a specific legacy. A bequest describes the act of leaving a gift to a loved one through a Will.
A Will can list personal possessions, property, specific bank accounts or investments, and state who will receive these. These are specific legacies. A Will may also list set amounts of money that the testator wants to leave to different individuals or charities. These are pecuniary legacies.
There are different ways to leave a gift in your Will.
A residuary gift is a share of your estate – a percentage or the whole of an estate left over after making specified legacies and any liabilities taxes or costs have been paid
A pecuniary gift is a fixed amount of money, for example £1000 to my niece.
These are particular items, such as jewellery, paintings, items of personal importance, as well as stocks and shares.
A Will trust is an arrangement which comes into effect on your death, granting the named trustees control over assets on behalf of others – the ‘beneficiaries’.
A beneficiary might be:
- A named individual
- A class of people, such as “my grandchildren and their descendants”
- A charity, or a number of charities
- Any other organisation, such a as a company or sports club
If you think you would like to create a trust in your will we recommend speaking to your solicitor.
If the beneficiary of a gift dies before the testator, the gift will fail. In these circumstances, the general rule is that the gift falls into the residue and does not form part of the beneficiary's estate.
A specific bequest fails if the property is no longer in the estate at the time of the testator's death. For example I leave my home to my son and I no longer have the property when I die.
A gift may also fail if the beneficiary is not properly identified.
A gift may fail for uncertainty if the property cannot be identified from the description in the Will.
The gift is part of the Will so can not be overwritten.
In rare cases, a deathbed gift can overrule the instructions left in a Will. This means if you're a beneficiary of an estate, your share could be reduced because of a deathbed gift to someone else. Because they're made at a very sensitive time, deathbed gifts have to meet several conditions in order to be valid.
You may be able to challenge a lifetime gift if the donor did not have the mental capacity required to make the gift. See more here.
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Wills and Probate Team
Manzurul is a Member and heads our Wills and Probate team.
Martyn is our Chairman and the firms' Compliance Officer for Legal Practice