14/10/2026
BE AWARE…
Lifetime gifts: when a client’s inheritance is smaller than it should be
A client comes to you after a parent’s death. The will leaves them an equal share, but by the time the estate is valued there’s very little left to share. The house was transferred to a sibling the year before. Savings went out in the months leading up to the death.
In cases like this the will is often perfectly valid. The problem is what happened before it, and challenging the will won’t fix that. What needs challenging is the gift itself. Knowing the grounds, and what evidence to secure early, means you can point your client in the right direction before the trail goes cold.
Why lifetime gifts fall outside the will
A will only deals with what someone owns when they die. Cash, property or valuables given away before that point usually sit outside the estate entirely. So a client can be left with far less than they expected, even where there’s nothing wrong with the will.
The grounds for challenging a lifetime gift
Lack of mental capacity
To make a valid gift, the donor needed to understand what they were giving away, who they were giving it to, and what effect it would have. The level of understanding required goes up with the size of the gift. A birthday present needs very little. Giving away a home or most of their savings needs the same kind of understanding as making a will, including an awareness of who else might have expected to benefit.
Where the donor was living with dementia or another condition affecting their memory or judgement when the gift was made, that may be grounds to have it set aside. Medical records, GP notes and care home records are usually central.
Presumed undue influence
This is where lifetime gifts differ most from wills, and it often works in your client’s favour. To challenge a will, undue influence has to be proved, which is notoriously hard. With a lifetime gift, the law can presume undue influence where:
– the donor placed trust and confidence in the person who received the gift, such as a carer, a family member who managed their affairs, or a close adviser
– the gift is large or unusual enough that it calls for an explanation
If both apply, it’s then up to the recipient to show the gift was given freely. That shift in the burden can make a real difference to a client’s prospects.
Gifts made to defeat an Inheritance Act claim
Under section 10 of the Inheritance (Provision for Family and Dependants) Act 1975, the court can claw back gifts made in the six years before death if they were intended to defeat a claim under the Act and the recipient didn’t pay full value. It only applies where the client is bringing an Inheritance Act claim, but it stops someone giving everything away shortly before death to leave a dependant with nothing.
Gifts made by an attorney
If the donor had a Lasting Power of Attorney, the attorney’s power to make gifts is very limited. Gifts can only be made on customary occasions, such as birthdays or weddings, to people connected to the donor or to charities they supported, and only where the amount is reasonable given the size of the estate. An attorney who has given away more than that may have to pay it back. We cover this in more detail in our article on attorney misuse of funds.
Who brings the claim?
A claim to set aside a lifetime gift usually belongs to the estate, so it’s normally brought by the executors or administrators. Where the executor is also the person who received the gift, there’s an obvious conflict of interest. In that situation the court can be asked to remove them and appoint someone independent.
If your client is a beneficiary rather than an executor, the first step is usually to raise their concerns with the executors in writing and ask them to look into it.
Evidence to secure early
Most of these cases turn on what can be pieced together from the paperwork, so it’s worth encouraging clients to start gathering it as soon as possible. Useful evidence includes:
– bank statements covering the period before and after the gift
– Land Registry records showing any property transfers
– medical records, particularly around the time of the gift
– care home or care agency notes
– emails, letters or messages about the gift
– accounts from people who saw the donor regularly
Executors can request the deceased’s financial records directly from the bank. Beneficiaries can ask the executors to get them.
Time limits
There’s no single time limit for challenging a lifetime gift. It depends on the type of claim. A claim based on undue influence can fail if the client waits too long without a good reason, and an Inheritance Act claim must usually be issued within six months of the grant of probate or letters of administration. Either way, early referral puts your client in a stronger position.
What happens if the challenge succeeds?
If the court sets the gift aside, the asset or its value goes back into the estate. It’s then shared out under the will or, if there isn’t one, the intestacy rules. Where the recipient has since spent the money or sold the property, they may have to pay back its value.
Refer a client
If a client tells you an estate is much smaller than it should be, or you’re concerned a gift was made under pressure or while the donor was confused, our team can look at what happened and give an honest view on whether there’s a claim
