Sometimes the value of an estate is low or even zero meaning beneficiaries named in the last valid Will receive nothing. This can happen after suspicious lifetime transactions, such as lifetime savings given away as an alleged “gift” by an elderly or vulnerable relative, or a person with access or control of the finances helps themself. So what can a beneficiary do in this scenario to claim back what should have been left to them by a loved one?
A lifetime transaction can be challenged on various grounds, such as lack of capacity or undue influence, to put right the injustice and see the inheritance reach the correct intended recipient.
Lack of capacity: If the value of a gift is trivial in comparison to a person’s other assets, a low degree of understanding is sufficient. However, if a gift in effect disposes of the person’s only asset of value and pre-empts the division of their estate under their Will, then the degree of understanding required is as high as that for a Will.
Undue influence: This doesn’t only apply to Wills but can also apply to lifetime transactions. An undue influence challenge to a lifetime transaction can often be more straightforward than challenging a Will. This is because assets will no longer be needed by the deceased following death. However, with lifetime gifts then assets might in fact be needed in the future by the person that gave the assets away. It can be more suspicious if a lifetime gift is made and a person is left short of funds during the rest of their lifetime.
For lifetime gifts the court may therefore presume undue influence on transactions involving a relationship of trust and confidence such as carer/patient, parent/child, and when the transaction is of such a large size or important nature that it calls for an explanation.
Gifts to unexpected beneficiaries seemingly without good cause may also ring alarm bells, or to a close family member to the detriment of other close family members. If the gift is made by a person acting as attorney under an LPA and goes beyond a reasonable amount on customary occasion e.g., birthday, Christmas then it can be challenged.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.