Lifetime gifts to children and the “presumption against double portions"

Many parents will make substantial gifts to their children, especially in this economic climate where the younger generation are finding it increasingly difficult to get onto the property ladder.

For example, if a parent makes a substantial gift to a child during their lifetime and then subsequently seeks to leave part of their estate to that child, should that lifetime gift be taken into consideration as part of their inheritance?

There is a presumption (known as the “presumption against double portions”) which says that where certain criteria are met, a lifetime gift will be treated as an advance of their inheritance unless it can be proved to the contrary.

The criteria for the presumption against double portions are that the gift:

• Is a lifetime gift
• Is substantial in its own right irrespective of the value of the estate
• Is made by a parent (or someone who has assumed the role of a parent)
• Must be made with the intention of establishing the child in life or making substantial provision for them

The courts presume that a parent would not intend to benefit one child twice over at the expense of others. The presumption against double portions is intended to promote fairness, however, the presumption is rebuttable. The parent’s intention behind the gift is therefore an important factor.

What can you do to make the position clearer, avoid argument and, if necessary, rebut the presumption?

• Keep clear evidence of gifts made and when
• Record reasons for the gifts
• Document the intention behind the gifts, ie are they made in addition to the will gifts or not?

The presumption against double portions can be rebutted if there is strong evidence that the gift was not a portion (ie it does not meet the above criteria) or that the parent did not intend it should be deducted from future inheritance.

It may be that the will includes a “hotchpot” clause (sometimes known as a “bringing into account clause”), which specifies whether any lifetime gifts should be taken into account when calculating shares in the estate.

However, if this is not the case then the position will very much depend on the factual evidence available and particularly, how the parent described the gift when it was made. Therefore, it is important to keep clear evidence of any gifts made (and the reasons for these gifts). This may be through attendance notes, emails, letters or witness evidence.

If you have any questions in respect of the presumption of double portions, or making a gift to a child more generally, then please do not hesitate to contact our private client team.