Can You Challenge A Lifetime Gift?

Written by Tanya Waterworth, Digital Content Writer

About Our Legal Expert: This content is produced with oversight by Michael Jefferies, Managing Director who has over 30 years’ legal experience.

Your Guide to Inheritance Disputes

When someone passes away, focus is often on the will, but disputes may also arise over gifts the loved one made during their lifetime. These particularly come under the spotlight if they reduce the size of the estate or appear suspicious. They are known as lifetime gifts and can be challenged, or alternatively you may want to defend a gift that is being challenged.

Essentially a lifetime gift is something a person gives away during their lifetime rather than leaving it to someone in their will and may become part of a will dispute among family members in conflict.

So if you want to challenge or defend a lifetime gift, we partner with specialist contentious probate solicitors who can help – so contact our team to arrange a free consultation.

What Exactly Is a Lifetime Gift?

A lifetime gift has three legal requirements:

1. Intent – The person giving the gift intended to make it.
2. Delivery – The item, money, or property was transferred to the recipient.
3. Acceptance – The recipient accepted the gift.

Common examples of lifetime gifts may include:

• Cash transfers to children or partners
• Transferring property ownership
• Adding someone to the title deeds of a home
• Valuable assets, such as jewellery or art given away shortly before death
• Paying for cars

Why Do Lifetime Gifts Cause Disputes?

Lifetime gifts typically become the subject of a dispute when:

• They significantly reduce the value of the estate
• One beneficiary receives a lot more than others
• The gift was made when the giver was vulnerable or unwell
• There is suspicion of undue influence or financial abuse
• The deceased lacked mental capacity at the time

In such scenarios, you may want to bring a contentious probate claim.

Can a Lifetime Gift Be Challenged in Contentious Probate?

Yes, in England and Wales, lifetime gifts can be challenged. In fact, this is becoming increasingly common in probate disputes.

However, challenges generally arise when the gift is believed to be:

• Invalid due to lack of capacity
• Made under undue influence
• A gift with reservation of benefit
• A fraudulent or suspicious transfer

Below are some of the legal grounds for challenging a lifetime gift:

Lack of Mental Capacity

A lifetime gift can be challenged if the donor was lacking mental capacity at the time they made it.

To have capacity, the donor should understand:

• The nature and value of the gift
• The consequences of giving it away
• Who might be affected by the decision

So, if the donor had dementia, cognitive decline, or mental illness, you may be able to challenge it.

Undue Influence

This is often one of the grounds for will disputes.

If the donor has been pressured, manipulated, or coerced into giving the gift, it may be overturned.

Examples include:

• A carer, child, or partner who isolates the donor
• A person who manages the donor’s finances for personal gain
• Gifts made shortly before death when the donor was dependent

As undue influence can be subtle, circumstantial evidence is taken into account.

Fraud or Misrepresentation

The gift may be reversed if the recipient obtained the gift through:

• Lies
• Deception
• Forgery
• Abuse of trust

Gifts With Reservation of Benefit

If a donor “gives away” an asset but continues to benefit from it (e.g., giving a house to a child but continuing to live there rent-free), HMRC may treat it as still part of the estate.

These gifts may be investigated during probate and may set off tax disputes or legal challenges.

Claims Under the Inheritance (Provision for Family and Dependants) Act 1975

If a lifetime gift deprives a dependant of reasonable financial provision, it may be considered a deliberate deprivation of assets.

As a result, the court may order that the assets be returned to the estate.

How to Challenge a Lifetime Gift

To challenge a lifetime gift, you need to:

1. Gather evidence (medical records, financial documents, witness statements)
2. Assess the donor’s capacity at the time of the gift
3. Investigate the circumstances of the transfer and how the recipient was involved
4. Work with a contentious probate solicitor to gather evidence and start the legal process.

Courts may potentially order:

• The gift to be reversed
• Compensation to be paid
• The asset to be returned to the estate

Can a Lifetime Gift Affect Inheritance Tax (IHT)?

Yes. Many lifetime gifts fall under the 7-year rule.
If the donor dies within 7 years of making the gift, it may be counted back into the estate for IHT purposes.

Suspicious gifts may lead HMRC to investigate.

Contact Us for a Free Consultation

If you feel there are red flags regarding a lifetime gift, such as the donor was pressured, lacked capacity or it resulted in unfairness in the estate, you may want to challenge it to return the asset back into the estate.

It’s important to get contentious probate legal advice as early as possible while the evidence can still be obtained. Proper legal advice can make all the difference.

Jefferies Claims works with lawyers who are highly experienced in contentious probate and who can assess your case. They offer a range of fee structures, including ‘No Win, No Fee’ for certain cases along with other flexible funding.

For help today, contact our team at 0333 358 3034 or complete our online contact form to arrange an initial no-obligation telephone consultation.