There is a presumption under common law that a parent would not intend on giving the same gift to a child twice.
It is understandable that parents will often want to provide financial assistance for their children to help them establish themselves in life. However, this can in some circumstances affect that child’s entitlement to their inheritance from a parent’s estate.
Where a parent leaves a gift in their Will to a child and then some time after making the Will, makes a gift to the same child, that later gift is treated as an advancement of their inheritance, unless there is evidence to the contrary.
For example, a parent has 2 children; They make a Will leaving their estate equally to both children. After making their Will, they gift £100,000 to one child to purchase a house. When the parent dies, that £100,000 is treated as an advancement of their inheritance and that child inherits £100,000 less than their sibling.
The reason behind the presumption is to ensure fairness between siblings and because a parent would often not wish for one child to benefit more favorably than the other(s).
The presumption does not apply to every gift. The gift must amount to a “portion”. When considering whether a gift constitutes a portion, the Court will look at the purpose of the gift, its size and any other relevant circumstance. In the leading case of Phillips v Cameron [1999] Ch 386 the court found that a portion is a gift “intended to set up a child in life or to make substantial provision for him or her”.
Not every gift will be treated as a portion. As stated in Barraclough v Mell [2005] EWHC 3387, evidence of the testator's intention when making the lifetime gift is key. A lifetime gift from a parent to a child that falls under the categories of 'pure bounty', 'spontaneous bounty', or 'mere gifts' will not be considered to be a portion.
If there is evidence that the parent did intend the lifetime portion to be a further gift, the child will not have to account for it and will still receive the entirety of their inheritance under the will.
In a more recent case of Sheron v Sheron [2021] EWHC 2526 the testator had three children. In his Will he had left a house to one son. Subsequently, the father sold one of his properties and gave £350,000 to his son to help him to buy a different house. The High Court found that this cash gift was intended to substitute a gift of a property in his Will and the father would not have intended to give his son both.
Whether the presumption applies is not always straightforward. If you are an executor dealing with an estate or you are a beneficiary of an estate and there is a dispute over whether the presumption should or should not apply, get in contact with our Will, Trust and Estate disputes team today on 01484 821500 or email willdisputes@ramsdens.co.uk.
The above article is for illustrative purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any part of the information given.