Portions and Double Portions in the Administration of Estates
Andrew Carswell is a partner specialising in Civil Litigation at Trethowans. He explains some of the unusual aspects of estate administration involving Portions and Double Portions.
I am pleased to say that Portions and Double Portions have nothing to do with food. Instead they are name given to certain legal presumptions regarding the payment of money during a person’s lifetime.
People make Wills to make provision on death and typically parents will divide their estate between children- in whatever proportions they consider appropriate. However, in later years parents will often want to make lifetime provision for children in various ways and for different purposes. It might be a generous Christmas present or gift on marriage. Alternatively, it might be a deposit to buy a home. In other cases it may be more substantial provision possibly to mitigate inheritance tax on death.
Difficulties can unfortunately arise when children are treated differently and one receives less than the other. There may be a feeling or belief by one child that such payments received were, or ought to be treated as being received, “on account” of the other child’s ultimate share in the estate.
A brief example illustrates the problem. Supposing Alan and Beryl make Wills leaving their estate equally between their children Brian and Sandra. Sandra is settled and has no particular need for an advancement of any money, but Brian has gone through some difficult times and wants to buy a property. Alan and Beryl give him, during their lifetimes, £100,000 as a significant contribution towards a home. Not much is said about the terms of the payment, albeit that it is not a loan.
Alan and Beryl die a few years later leaving an estate of £400,000. If the payment to Brian is not taken into account, both he and Sandra receive £200,000 each, but overall Brian has received £300,000. Had the payment not been made to Brian, or if it were taken into account, each of them would have received £250,000. Failing that Sandra stands to lose £50,000.
Wills can be drafted so that payments can be taken into account, but as ever this is not always done so the law has to be adapted and applied to help.
The rule against double portions is based on the presumption that a parent wants to treat his/her children equally and not make double provision for one child at the expense of the other. The rule presumes that a legacy in a Will is adeemed where a parent makes a Will leaving a legacy to his/her child, and then makes a subsequent lifetime gift to the other. Only lifetime gifts intended to be ‘pure bounty’, ‘spontaneous bounty’ or ‘mere gifts’, or for a particular purpose are caught.
There have been a number of cases over the years about portions. One in particular Re: Cameron (Deceased) 1999 involved a mother who left a Will benefitting her four sons equally. She subsequently paid a substantial amount for private education for one of her grandchildren. On her death her son (whose child had been provided for) argued that the money paid for his son’s education was not on account and was not a portion. His brothers argued differently. In a landmark decision the High Court decided that the gift was so substantial, that it constituted a portion and therefore should be taken into account.
These cases occur rarely in practice, but when they do one needs to be careful and expert legal advice is recommended.