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Case highlights the need for caution in family affairs, says law firm
Article date: 31/10/2013
Leading law firm Higgs & Sons says a recent case involving a disputed lifetime gift highlights the need to act with caution when dealing with the affairs of close and elderly relatives.
Experts at Higgs & Sons say the recent ruling of Hart -v- Burbidge underlines the importance of those involved , particularly the person being assisted, obtaining independent legal advice.
Doug Houghton, a solicitor in Higgs' Dispute Resolution Team, said Hart offered a salutary lesson.
Doug said it involved a mother who transferred money to her daughter before her death so that she could buy a home. The mother - M - lived briefly in the house but it was registered to her daughter, S, and her husband.
"Unknown to S, the transfers resulted in the failure of various gifts in M's will. It was alleged by the disappointed beneficiaries that S, who had acted as M's sole attorney, had asserted undue influence upon M," said Doug.
In such cases the law presumed that the daughter was in a position of influence over her mother and that she had used that influence to secure the transaction.
"In Hart, the Court found that S's relationship with M, was one of trust and confidence and that there was no evidence to rebut the presumption of undue influence which arose.
"The Court was concerned as to whether M had fully understood the implications of the gift and, in particular, by the fact that M had not obtained independent legal advice upon whether the gift was in her best interests, the consequences of her decision or how her interest could be protected," Doug said.
"Although the Court did not accept that there was any evidence that M had been coerced by S, or her husband, the transactions were set aside on the basis that it was not satisfied that M was free from any influence arising from their relationship of trust and confidence, and the fact that M had not obtained legal advice upon the transaction was a significant factor."
Gavin Faber, a Partner in the Dispute Resolution Team, said the case reinforces the need to take care when dealing with the affairs of an elderly or vulnerable family member. Where a gift is made to a person who is assisting a vulnerable individual, anyone who is adversely affected is likely to question what happened.
"Although an individual may direct that a gift or loan be made, the person who receives the benefit may have difficultly proving the transaction was made without undue influence. Even though they may have acted innocently, their position of trust and confidence could result in the gift being repaid."
"In particular, the case highlights the need for people who have power of attorney over a relative's affairs to act openly and do all that they can to ensure that the person making a gift in their favour takes legal advice, otherwise it increases the risk of the gift being set aside."
"From a contentious perspective, where a beneficiary loses their entitlement under a will as a result of lifetime gifts or there are suspicious circumstances surrounding a lifetime gift, then there may be grounds for the gift to be set aside when the recipient of the gift was someone in a position of 'trust and confidence'. Higgs & Sons can advise upon whether a claim can be pursued to set the gift aside."
Higgs & Sons works from two offices in the Black Country - Waterfront Business Park in Brierley Hill and Kingswinford. The firm employs more than 200 people, which includes over 100 specialist lawyers.
For specialist advice on any issue of contentious trusts and probate, contact Gavin or Doug on 0845 111 5050 or email email@example.com