Challenging Lifetime Gifts

There are many reasons why people choose to make gifts during their lifetime - they may do so as part of their estate planning, or because they want to be able to provide for their beneficiaries during their lifetime, rather than waiting until their death.  Lifetime gifts can range from transfers of property to gifts of expensive family heirlooms or cash.

The usual position with lifetime gifts is similar to the longstanding principle of testamentary freedom that applies to wills – a person (known as the donor) is free to gift their estate to whoever they wish. Lifetime gifts can raise suspicions, however, and are often discovered once the donor has passed away and their estate is much smaller than anticipated.  These dispositions can include outright gifts as well as asset sales at an undervalue, solely owned assets which were transferred into joint names and loans on favourable terms.

Can I challenge a lifetime gift?

A lifetime gift can be challenged if you believe that it was invalid or not made in accordance with the wishes of the donor. For example:

• if the donor did not have sufficient mental capacity at the time of making the gift
• if the gift was made unlawfully or as a result of financial abuse by the donor’s attorney or deputy
• if the gift was made as a result of undue influence or coercion
• if the gift was made as a result of mistaken belief
• if the gift was made as a result a result of fraud or illegal activity

How to challenge a lifetime gift?

It is possible to challenge a lifetime gift whilst the donor is still alive or after their death. 
If the donor is still alive but has lost capacity, then the power lies with the Office of the Public Guardian and/or the Court of Protection.

If there is an attorney or deputy, the Office of the Public Guardian should be notified as it has a statutory responsibility for investigating such concerns. Attorneys can be ordered to produce an account of their dealings with the donor’s money and may be ordered to pay the money back. An application can also be made to the Court of Protection to revoke their appointment and appoint a Court appointed deputy.

If the donor has passed away by the time the suspicious gift or transaction has been discovered, then the executors or disappointed beneficiaries may be able to take action to set it aside.

How we can help

Our team of specialist lawyers have extensive experience of dealing with a range of different circumstances where there is a dispute as to the management of a person’s property and financial affairs.  We can help whether you are concerned that someone you know is being financially abused, you are concerned that you yourself are subject to financial abuse, or you are the person being accused.

We routinely assist with:

• Reports to the Office of Public Guardian and Social Services
• Applications to the Court of Protection, including applications to appoint a deputy, for a declaration as to the vulnerable person’s capacity and for the removal of attorneys and deputies
• Claims for the recovery of funds and/or the setting aside of transfers of property (before and after death)
• The resolution of financial abuse claims by alternative dispute resolution, such as mediation, early neutral evaluation and joint settlement meetings