Action stations – the role of personal representatives in challenging suspect lifetime transactions

It can come as a shock to discover that a loved one transferred property, gave away substantial assets, or signed legal documents shortly before their death. In some cases, these transactions may be perfectly legitimate. In others, they may have been the product of undue influence, an attempt to reduce the value of the estate, or part of a wider effort to conceal assets from beneficiaries.

Questions may be raised in relation to the actions of a loved one, or even the attorney appointed, for example, under a lasting power of attorney, to manage their estate where they have lost capacity. A particular ‘red flag’ may arise where the attorney has acted outside their authority in relation to an estate just before death.

These scenarios raise a difficult question for those responsible for administering an estate, its personal representatives (PRs): if a lifetime transaction appears suspicious, should they challenge it, or remain neutral and leave the beneficiaries to resolve the issue between themselves?

Teixeira v Moaven

In the recent High Court case of Teixeira v Moaven [2026] EWHC 1215 (Ch), various declarations of trusts made shortly before death were held to be shams and the properties returned to the estate.

The claim concerned the estate of Abbas Moaven, who died in 2012. Shortly before his death, while seriously ill, he signed declarations of trust relating to four London properties registered in his sole name. The documents purported to confirm that the properties were, and had always been, held beneficially in equal shares for Abbas, his brother and their mother.

If effective, the declarations substantially reduced the value of Abbas’s estate. His widow and children challenged them, arguing that they were shams intended to create a false impression of the extent of his assets.

The High Court agreed. The declarations had no legal or equitable substance and the properties therefore formed part of the estate.

The case highlights the steps that beneficiaries and PRs can take when concerns arise about suspicious transactions made in the final months of a person’s life, and is interesting not only for its treatment of sham trusts, but also for what it says about the role of PRs where the ownership of estate assets is disputed.

What are suspicious transactions?

A suspicious transaction is not a legal term, but generally refers to a transfer of money, property or other assets that raises concerns about its legitimacy.

Examples might include:

• a property being transferred to a family member shortly before death;
• a declaration of trust appearing for the first time after death;
• large gifts made while the deceased was seriously ill;
• assets being transferred for little or no value;
• documents that contradict the deceased’s previously expressed intentions.

Common grounds for challenging a transaction

Just as there are various types of suspicious transactions, there are also a number of different ways in which they can be challenged.

Lack of mental capacity

If the person who has died lacked the mental capacity to understand and approve the transaction, it may be possible to challenge its validity.

This issue commonly arises where a person was suffering from dementia, serious illness or cognitive impairment at the time the transaction was made.

Undue influence

A transaction may be challenged if the deceased was pressured or coerced into making it.
The court is particularly alert to situations involving vulnerable individuals, dependency relationships or significant changes that benefit one person at the expense of others.

Fraud or sham arrangements

As was found in Teixeira, sometimes documents are created to give the appearance of a legal arrangement that was never genuinely intended to take effect.

Transactions intended to defeat claims

In some circumstances, the court may intervene where assets have been transferred in an attempt to prevent certain individuals from benefiting from an estate or making a claim against it. For example, in Teixeira the widow pleaded, in the alternative, that the transactions had been of an undervalue contrary to section 423 of the Insolvency Act 1986, or that, under section 10 of the Inheritance (Provision for Families and Dependants) Act 1975, they could be brought back into the estate.

What can PRs do?

PRs have a duty to identify, collect and protect estate assets. Traditionally, they are expected to remain neutral in disputes between beneficiaries. There are good reasons for this. Estate funds should not ordinarily be spent pursuing litigation which is, in substance, a dispute about who should inherit.

But Teixeira demonstrates the important distinction between a dispute between beneficiaries over the division of an estate and a dispute about what assets belong to the estate in the first place. It is an important reminder that neutrality does not always mean passivity.

Where there is credible evidence that assets belonging to the deceased may have been diverted or placed beyond the estate through a questionable lifetime transaction, the PRs’ duties to identify, collect and protect the assets mean that the PRs are entitled, and in some cases required, to take an active role in recovering those assets.

What should PRs do when a lifetime disposition is suspect?

The answer will always depend on the circumstances. PRs should not automatically challenge every substantial lifetime gift simply because disappointed beneficiaries question it. Litigation carries significant costs risks and the deceased was, of course, generally free to dispose of their own property during their lifetime.

However, warning signs (such as questions over capacity, or the timing of a gift) may justify further investigation, and the available legal routes will depend on the facts.

Before committing estate or trust funds, PRs and trustees should consult with the beneficiaries. Then (whilst always keeping one eye on the proportionality of the costs of any actions they take) establish the relevant documents, obtain available financial and medical evidence, preserve electronic records and seek an explanation from the recipient of the disposition.

If the suspicions remain, they should then obtain specialist advice addressing merits, standing, limitation, recoverability, proportionality and the likely costs of litigation (and the availability of an indemnity from the beneficiaries or an order from the court endorsing their action). Alternatives such as disclosure requests, negotiation or mediation should always be considered before commencing any court action.

Final thoughts

Suspicious transactions made shortly before death can have a substantial impact on the value of an estate and the inheritance ultimately received by beneficiaries. However, the existence of a signed document does not necessarily mean the matter is beyond challenge.

The decision in Teixeira v Moaven demonstrates that whilst trustees and PRs should not fund speculative disputes between beneficiaries, neither should they ignore credible evidence that assets have been concealed, diverted or removed through a legally ineffective transaction.

We would be happy to advise any beneficiaries, PRs or trustees who have concerns about gifts, transfers of property or trust arrangements made shortly before death. Please contact us for further information.