Private client
Wills, probate and inheritance: recent developments and imminent reforms
Nicola Laver looks at recent developments in wills and probate law and practice, including radical proposals for wills reform.
About the author
Nicola Laver is a freelance legal journalist/editor and a former solicitor.
2017 proved to be another dynamic year for private client. Rulings in favour of disinherited adult children claiming reason able provision out of a parent’s estate has led to a rise in wills disputes and, more significantly, there are radical proposals for a major overhaul of wills law. Wills reform is widely acknowledged as being long overdue, with existing legislation dating as far back as the Victorian era.
Ilott v Blue Cross and others
The long-running and seminal case of [2017] UKSC 17, 15 March 2017 finally concluded in favour of an adult daughter who was disinherited, but won a share of her mother’s estate. As a brief reminder, the testator, Mrs Jackson, left her entire estate to four charities: none of which she had showed any interest in during her lifetime. Mother and daughter (Mrs Ilott) had been estranged for around 26 years; however, what was an important factor for the courts was that the estrangement appeared to be the mother’s fault. She had ‘acted in an unreasonable, capricious and harsh way’ towards her daughter, who had no expectation of inheriting from the estate and was (at the time of her court application) dependent on state benefits (Ilott v Mitson; Michael Peter Lane (personal representatives of Melita Jackson deceased); Blue Cross Animal Welfare Charity; Royal Society for the Protection of Birds; Royal Society for the Prevention of Cruelty to Animals [2015] EWCA Civ 797, para 22).
The Supreme Court reinstated the ruling of the district judge of first instance, and awarded the daughter £50,000 (the Court of Appeal had increased that award to £143,000). The Supreme Court found that the Court of Appeal had given little weight to the mother’s clear wishes and the long period of estrangement. Another important observation of the court was that the testator’s chosen beneficiaries did not need to justify their claim, whether by need or by expectation.
Nahajec v Fowle
Though the Ilott ruling appears to have incentivised other aggrieved individuals to make a claim against a parent’s estate, each case will be treated as fact specific. Hot on the heels of Ilott came a ruling from the county court, which awarded an adult daughter reasonable provision out of her deceased father’s £265,000 estate, which he left to an impecunious friend (Nahajec v Fowle (in his capacity as executor of the estate of Stanley Nahajec deceased and as beneficiary of the estate) [2017] EW Misc 11 (CC), 18 July 2017. The claimant’s father had cut out his three children, from whom he was estranged. Importantly, he had left a letter giving his reasons for so doing.
The deceased’s only daughter claimed £59,000 out of the estate under the Inheritance (Provision for Family and Dependants) Act (I(PFD)A) 1975. Like the claimant in Ilott, she was in financial difficulties and the estrangement was not her fault. She sought the cash to fund veterinary nurse training, and related living and travel expenses. She also wanted to settle various debts.
While her claim was allowed, it was limited to £30,000. There was, for instance, no evidence she had planned to do the veterinary course while her father was alive. In any event, there was always the possibility she might never take the veterinary course.
Martin v Williams
In another dependency claim, this time by the testator’s partner, the trial judge diverted a half share in the testator’s property to the partner, but the testator’s widow appealed successfully (Martin v Williams [2017] EWHC 491 (Ch)). The testator and the appellant/defendant were married when he died, though they had lived separately for a long time. He had, in fact, lived with his partner for many years, and they owned their property jointly as tenants in common in equal shares.
The testator’s widow was the residuary beneficiary under the will, and his share in the property automatically passed to her. The testator’s partner - who had separately inherited a half share in a Bristol property (in which her sister lived) - brought her claim under the I(PFD)A. The court made an order that the testator’s share in the property pass to the partner, excluding consideration of the Bristol property on the basis that she could not evict her sister.
The High Court allowed the widow’s appeal on a number of grounds. Notably, the trial judge did not have sufficient reasons to exclude the Bristol property from consideration (this was a ‘perverse conclusion’ ) (para 40). This property was a significant financial resource available to the partner, and a sibling’s life interest in same was not a good enough reason not to consider it. The judge had also failed to follow the approach set out in the I(PFD)A, and he had understated the partner’s position and overstated the widow’s position. The court made an order giving the partner a life interest only in the testator’s half share of the property, with all other rights (specifically the reversionary interest) to vest in the testator’s widow.
A claim by a disinherited adult child which was generating interest was being heard in the High Court at the time of writing. A farmer died in 2012 leaving a £3m estate, having made a will in 2010 leaving his estate to his wife and daughters, but nothing to his son. The claimant son has reportedly argued that he was promised the farm on his father’s death, and that his late father had dementia and did not have capacity to make the 2010 will. The claimant worked on the family farm and in the family farming business for 35 years since his school days, and said that his father led him to believe that he would inherit the farming estate. His mother and sisters, he claims, influenced his father so that they would benefit and not him. If he succeeds, he will benefit under an earlier will or under the statutory intestacy rules.
The courts are becoming increasingly flexible in the way they approach wills and probate disputes cases, as the dependency claims above illustrate. The High Court has taken a similar, practical and common sense approach in a somewhat unusual case involving a homemade holographic will which it held to be valid (Vucicevic and Bond v Aleksic; Amilofije; Serbian Orthodox Church (Montenegro Branch); Serbian Orthodox Church (Head O›ce in Serbia); Serbian Orthodox Church Sveti Sava (London); Aleksic; Attorney General; and Dubljevic [2017] EWHC 2335 (Ch)).
The testator, who was originally from Montenegro, arrived in England after World War II. His English never became particularly fluent. He became wealthy and, on his death, left a net estate just short of £2m.
The testator wrote and signed a holographic will, but there were various legal problems which the court had to address: the will was undated, save for noting the year ‘2012’; there was no attestation clause; it lacked clarity; and various deletions and alterations had been made. However, one of two witnesses who attested the will made an affidavit of due execution, which closed the issue of whether there had been due execution. Most of the issues for consideration were to do with the terms of the will itself.
The court upheld the will. The judge found that though the grammar was faulty, ie, words were misspelt and punctuation was misplaced, complicating the task of ascertaining the testator's intention, this did not alter it.
Notably, the judge said: ‘Bad English can still make a good will, as long as the testator’s meaning can be understood’ (para 10). He continued: ‘[ This was] a home-made and handwritten will, made by a testator using a language not his own’, but the testator’s intention was clear (para 46).
Many spouses and partners want to make a will together. In most cases, they will make mirror wills, though sometimes they may prefer mutual wills.
However, there are risks if clients do not fully understand the implications. Chartered Legal Executives advising wills clients should note Legg and Burton v Burton, Brooks and Burton [2017] EWHC 2088 (Ch), where it was found that the will in question was a mutual will and not a mirror will.
There is a crucial difference between the two: mirror wills are wills made in terms that ‘mirror’ each other, but they are not binding on the surviving party; and mutual wills are as mirror wills, but they are legally binding on each other, even after the death of one party.
Mutual wills should include a clause to the effect that is intended to be a binding agreement. When the first of the parties dies, a trust arises over the survivor’s assets.
In Legg and Burton, a couple made wills leaving their estates to each other, and then to their children on the death of the survivor. The husband died and his wife survived him for
15 years; however, after her husband’s death, the testatrix changed her will more than a dozen times. As a result of difficulties with her relationship with her daughters (the claimants), the testatrix died leaving small legacies to the claimants under her final will, with the bulk of her estate going to her two grandchildren.
The testatrix’s daughters claimed that their mother’s later will was invalid. On the evidence, the High Court found that there were verbal agreements between the deceased couple not to revoke or change their wills at the time they made them, thus invoking the doctrine of mutual wills. This meant that the testatrix was not at liberty to change her will and make new wills. The claimants were granted a declaration that the estate of their mother was held on trust for them in equal shares.
The lessons for practitioners are clear: when spouses and partners want to make wills in similar terms, the implications of their intentions must be spelt out to them. Specifically, if their aim is to make the wills binding on each other after the death of the first party, this must be stated in the wills. The implications must be clearly explained to them orally and, preferably, in writing, with clear records on file to that effect.
How should you respond if a client wants to transfer assets (or sell them at an undervalue) with, perhaps, a long-term aim of avoiding care home fees? A potential risk is that the local authority could view this as a deliberate deprivation of capital, and clawback the money.
With property prices rocketing in recent years, many more people will be liable for inheritance tax on their death than previously. This means that more people are seeking to protect their assets during their lifetime, whether independently of making a will, or at the same time.
In response to this, the Law Society has issued a practice note for practitioners ‘Making gifts of assets’.¹ The guidance highlights the relevant issues that arise where clients ask practitioners for advice about transferring property or investments to family or friends, before their death, as a means of planning for their future care.
As the society says: Your role is more than just drawing up and registering the necessary deeds and documents to effect the making of a gift. Practitioners run the risk of being implicated if they are found to have aided a client's deliberate deprivation of assets. To protect yourself, you should advise your clients of the benefits and risks of transferring assets, and clarify their role and responsibilities in the process. For instance, does your client have the capacity to make the decision, or could they be under undue influence from a family member or someone else?
2018 could mark a sea change in the law of wills and probate, with large-scale proposals by the Law Commission to overhaul the law. A consultation, Making a will, which closed in November 2017, set out various radical proposals to reflect significant societal and cultural changes in England and Wales, including the emergence of and increasing reliance on digital technology.² The proposals include the following:
- Giving the courts more flexibility to uphold wills that do not meet legal requirements, but where the testator’s intentions are clear.
- Using the Mental Capacity Act test to establish capacity to write a will.
- Replacing ‘testator’ with ‘will-maker’.
- An overhaul of the rules protecting vulnerable testators.
- Introducing a statutory presumption of capacity to write a will.
- Reducing the age for making a valid will from 18 to 16.
- The possibility of online or electronic will writing.
- Providing statutory guidance for doctors and other professionals conducting an assessment of whether a person has the required mental capacity to make a will.
While the proposals have been broadly welcomed, there are some concerns. The Law Society, for instance, is urging particular ‘caution against proposals to usher in fully digital processes for making wills at this point in time’.³ There is also more widespread concern among practitioners that a level of informality and lack of certainty could lead to an increase in wills disputes, which was one of the reasons behind the proposals in the first place.
Whether the UK courts could follow the lead of the courts in Australia in a recent case may prove a step too far. In Re Nichol; Nichol v Nichol and another [2017] QSC 220, the Supreme Court in Brisbane accepted an unsent text message on the deceased’s mobile phone, which closed with ‘my will’, as a valid will (para 13). In giving judgment, Brown J said: ‘The informal nature of the text does not exclude it from being sufficient to represent the deceased’s testamentary intentions’ (para 45).
Perhaps, given the High Court’s ruling in Vucicevic and another v Aleksic and others above, English wills law reform could be unexpectedly far-reaching. 2018 could prove particularly interesting in this sector.
1 Available at: www.lawsociety.org.uk/support-services/advice/practicenotes/making-gifts-of-assets
2 For further details, visit: www.lawcom.gov.uk/project/wills
3 Law Society response: Making a Will, November 2017, available at: https://tinyurl.com/y82er2b7, p3