Disputed lifetime transactions / misappropriation of funds

A lifetime gift is often a gift of money, transfer of property, or gift of other assets that is made during a person’s lifetime, rather than passing in accordance with their will when they pass away. People often choose to make gifts during their lifetime to reduce and manage inheritance tax liability on death. 

There may be concerns regarding gifts and transfers that someone has made during their lifetime, especially when those transfers significantly devalue the estate of deceased. 

Lifetime gifts and transfers may be challenged in the following scenarios:

• Where there is a concern about the mental capacity of the deceased to make the gift at the time that they did. 
• Where there is suspected undue influence exerted on the deceased to make the gift. 
• Where the validity of the transaction itself is in dispute.  
• Where an attorney, appointed under a Power of Attorney, makes a gift outside of their authority. 

It is important to take early action if you are concerned about a lifetime gift to minimise the loss and disruption to an estate. Please do contact our specialist team who can advise in relation to such concerns.

On what grounds can you challenge lifetime gifts?

A lifetime gift can be challenged on the following grounds: 

• Lack of mental capacity
  
  • The donor must have had the necessary mental capacity to make the gift at the time of gifting. They would have to understand the nature of the gift and the effect it would have on their estate
• Undue influence
  
  • This is where someone has pressured or coerced the donor into making the gift against their will. A presumption of undue influence can arise where there is a relationship of trust and confidence between the donor and the donee and the transaction is sufficiently large to call out for an explanation
• Abuse of Power of Attorney
  
  • If the gift is significant and goes beyond what the donor would have done if they had capacity, then the attorney would have to seek the court’s approval. If they make a significant gift without this approval, it may be challenged
  • Where the donor retains capacity and was not aware of or did not approve the gift being made by the attorney, allegedly on their behalf