How lifetime gifts can cause problems on a future estate administration - double portions

Can gifts made during a deceased person's lifetime be bought into account when distributing an estate?

It is common for parents to leave a will stating that their estate should be divided equally among their children upon their death. However, during their lifetime, they may choose to gift one child more than the others. Without a specific clause in the will known as a 'hotchpot clause', it can be challenging for an executor to determine whether these lifetime gifts should be bought into account when distributing the estate. 

The presumption against double portions

The presumption against double portions is a well-established legal principle that applies when a parent (the testator) makes a significant testamentary gift to a child in their will whilst also giving the same child a substantial lifetime gift of a similar nature.

In such cases, it is presumed that the lifetime gift was intended to partially or fully satisfy the gift made in the will. This principle is rooted in the idea that parent’s intention is usually to make substantial provision for a child only once, particularly if a subsequent gift in a will would lead to inequality amongst their children.

In Re Cameron [1999] Ch. 386, the court confirmed that the presumption typically applies where the substantial lifetime gift resembles that of an inheritance in the sense that the gift is intended to help the child establish themselves in life or provide meaningful financial support. The presumption ensures that one child does not benefit twice at the expense of others. 

Evidence of intention

However, the presumption against double portions is only that: a presumption. To apply the principle, there must be evidence of the parent's intention at the time the lifetime gift was made. This evidence could include:

• A letter of wishes accompanying the will;
• A written note, email, or conversation by the deceased; or
• Circumstantial evidence, such as the size of the gift relative to the estate or the context in which it was given (Re Eardley’s Will [1920] 1 Ch 397).

Without such evidence, the presumption may not be sufficient to establish that the lifetime gift was intended to offset the gift in the will. For instance, if the gift was clearly intended as a standalone gesture or had a specific purpose, the presumption will not apply.

For example, in the case of Kloosman v Aylen and Frost [2013] EWHC 435 Ch, the deceased left his estate equally to his two daughters, Linda and Susan, and partly to his estranged son and grandchildren. After making his will, he sold his house and gave £100,000 each to Linda and Susan. The question arose as to whether these gifts should reduce their share under the will.

The court found that the gifts were not intended as part-payment of their inheritance. Instead, they were partly to reimburse Linda and Susan for the costs they had already incurred in caring for their father and partly to help with the anticipated future costs of his care. As such, the gifts did not have the character of portions, and the presumption against double portions did not apply.

Key takeaways

This issue often arises in estate administration and highlights the importance of understanding the testator's intentions and whether these are reflected in their will. Executors and beneficiaries should be alive to whether lifetime gifts should be offset against testamentary gifts to ensure a fair distribution of the estate. Where there is uncertainty, seeking legal advice can provide clarity and help to prevent potential disputes.

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For more information or advice, please contact Fiona Lawrence in our Contentious Probate and Trusts team.