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Sisters inherit estate despite substantial lifetime gifts

Presumption against double portions rule did not apply because cash was recompense

21 March 2013

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A father’s lifetime cash gifts were clearly intended to repay his family for support they provided before his death and did not count as a part of his estate, the High Court has ruled.

Former toolmaker and gardener Richard Frost used proceeds from the sale of his house to gift £100,000 each to daughters Susan and Linda, who cared for him throughout illness. They were also beneficiaries of his will along with their brother, Andrew, and his two children.

The house, in Lewisham, London, sold for £353,480, and the judge said the residue of the estate should be divided as per Mr Frost’s will without taking account of the gifts to the daughters.

Ruling in George Kloosman (executor of will) v Linda Aylen and Ors [2013] EWHC 435 (Ch) deputy judge Vivien Rose said, on the facts, “the gifts of £100,000 were not intended as ‘portions’ to the daughters or as an anticipation of their share of his estate”.

The judge referred to the ‘presumption against double portions’ and ‘doctrine of ademption’ established in the Cameron deed case [1999] Ch 386, where a ‘portion’ was loosely defined as “a gift intended to set up a child in life or to make substantial provision for him or her”.

The assumption, she said, is that, unless there is evidence to the contrary, “where a parent leaves a substantial share of his estate in his will to his children and then gives a large inter vivos gift to one of those children, and where both those gifts have the character of a portion […] the gift is supposed to be a substitute for the bequest.”

In this case, the judge said, the gifts were partly intended to repay Susan and Linda for the money spent taking care of their father and partly to help with inevitable future costs of his care and housing.

“The gifts in fact fulfilled that purpose in that they enabled his daughters to provide for him so that he could live in relative comfort for the short time that was left to him,” she said.

Property value

Richard Frost lived in the Lewisham house he bought in the 1950s until April 2007 when, at 83, he moved in with daughter Linda following a cancer diagnosis. Until then his other daughter Susan had been taking care of him, including helping with bills and supplementing his state pension.

He had just over £350 in cash and shares plus the house to his name.

The illness prompted Richard to write a will in September 2007, which intended to divide whatever property he had at the time of death. He bequeathed one third of his estate for each daughter.

He also left one sixth to estranged son Andrew and one twelfth to Andrew’s children, Robert and Tracey.

The court heard that Richard did not know how valuable the house was until its sale, after which he gave cash gifts to pay back his daughters. The will was already signed.

Rose DJ said: “He could not have known that £100,000 would in fact turn out to be about one third of the value of his estate at his death. It is not realistic to expect someone of his [frugal] background to contemplate recompensing his daughters for their money and time by adjusting the provisions of his will.”

Richard said he would give a much smaller gift to Andrew if he reconciled their relationship.

‘Substantial expense’

Linda and her husband, Stephen Aylen, had renovated their house for Richard’s benefit before and after receiving the lifetime gift, at “substantial expense”. Linda also gave up work to care for her father full time.

Stephen provided the main evidence telling the court some of the £100,000 has been used to trace Andrew, reimburse him for Richard’s wife’s funeral and donate to charity at Richard’s request.

He also said at the time the will was made, doctors told his father-in-law that he could expect to live for another five to ten years.

Matthew Hodson, acting for Andrew, submitted that “the gifts cannot be regarded as recompense… because if Mr Frost had died between the time the Lewisham house was sold and the date of the two gifts to his daughters, the proceeds of sale of the house would have been divided equally among his children without any special provision for the daughters’ recompense”.

The judge overruled the presumption against double portions “…because the inter vivos gifts in November 2007 to Mrs Aylen and Susan Frost did not have the character of portions”.

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Wills, Trusts & Probate