The Presumption Against Double Portions When Making A Lifetime Gift

With the majority of testators leaving a large share of their estates to their children, it is worth noting the presumption against “Double Portions”.

If applied, the presumption will result in a lifetime gift reducing a beneficiary’s share of an estate in proportion to the lifetime gift. The presumption is that a large lifetime gift made to the child of a testator is to be treated as an advance of their inheritance under the estate. Such presumption is applied on the basis the testator did not intend for the beneficiary to receive 2 portions.

In order for the presumption to apply a deceased testator must have left a substantial share of their estate to their children. The testator must have also made a substantial lifetime gift to at least one of their children. The presumption may then apply with the lifetime gift being treated as an advance of their inheritance.

The presumption may be rebutted when taking into account the intentions of the testator. On the evidence that the testator did not intend for the lifetime gift to reduce the beneficiary’s share of the estate, the presumption against Double Portions will be rebutted. The timing of the gift therefore becomes important as a gift made before a Will is prepared tends to suggest that the gift cannot be subject to the presumption against Double Portions as the Will could have been adjusted accordingly, or a hotchpot clause may have been included.

Kloosman v Aylen & Ors [2013] EWHC 435 (Ch)

Summary

The case of Re Frost provides an example of the presumption being applied. In this case, the Deceased made a Will before selling his house. On selling his house the Deceased made a lifetime gift of £100,000 to each of his two daughters.

On the death of the Deceased, the claimant submitted that the gifts represented an advance of their inheritance on the basis the payments would have reflected approximately their 1/3 share of the estate and made substantial provision for them. The requirements of the presumption were met and should the presumption prevail, the lifetime gifts would be taken into account with regards to their final share of the estate. Based on the evidence, however, the presumption against Double Portions was rebutted.

The Court considered the affairs of the Deceased and noted he was dependent on his daughters. The Deceased also appeared to be unaware that his estate would be approximately £300,000 upon his death. Instead, the lifetime gifts were considered to be payments reimbursing his daughters for the care and financial support provided. It was clear the Deceased did not intend for the gifts to reduce his daughter’s share of the estate and therefore the presumption against Double Portions would not apply.

When considering Double Portions, therefore, the intentions of the testator are paramount. The presumption will be displaced in the event it does not appear the testator intended for a lifetime gift to reduce the donee’s share of the estate.