In the case of Re R (Deceased)  EWHC 936, a claim was brought under the Inheritance (Provision for Family and Dependants) 1975 Act (“the Act”) for reasonable financial provision...
Avoiding a claim against your estate
Everyone is free to sign a Will leaving their estate to whom they please. However, there are exceptions to this general principle, and so here we aim to highlight those situations so that action can be taken to ensure that, as far as possible, the Will takes effect as intended.
A Will can be challenged in any of the following ways:
Lack of testamentary capacity: this is a claim that the person who signed the Will did not have the mental capacity to sign it (that is, they did not know what they were doing). An example might be someone who has signed a Will whilst in the advanced stages of a dementia-type illness.
Lack of knowledge and approval: this is a claim that the person who signed the Will did not know of its content when they signed it. An example might be someone who has signed a Will without actually having seen it in advance.
Undue influence: this is a claim that the person who signed the Will did not want to sign the Will but felt that they had no choice. An example might be someone who has signed a Will in favour of a carer who threatened to withdraw care if the Will were not signed.
Fraudulent calumny: this is a claim that someone “poisoned” the mind of the person who signed the Will against someone else, who would otherwise have been a natural beneficiary of the estate, by casting dishonest aspersions on his character, and as a result the Will was changed. An example might be where one child of the person making the Will incorrectly asserts that another child had been convicted of a criminal offence – and as a result the Will was changed – knowing that this was false or not caring whether it were true or false.
Estoppel: this is a claim that the person who signed the Will (or indeed someone who has not made a Will) did not honour a promise to leave part or all of the estate to the disappointed beneficiary who relied on the promise to their detriment. An example might be a farm worker who worked for years on minimal pay based on the farmer’s repeated assertions that “one day this will all be yours!”.
Mutual Wills: this is a claim that the person who signed the Will failed to honour a promise not to amend a previous Will made at the same time as, and in similar terms to, someone else. An example might be where a couple have signed Wills leaving everything, on the death of the last of them, to their respective children, but following the death of the first spouse/partner, the survivor changes their Will to the exclusion of the deceased spouse/partner’s children.
Inheritance (Provision for Family and Dependants) Act 1975: this is a claim that the person who signed the Will did not make adequate financial provision for the category of person set out in this Act of Parliament. Examples might be where a spouse/partner has not been left sufficient assets, or where a child of the deceased has been excluded from the Will.
Claims against estates are time-consuming and expensive. Whilst it is impossible to prevent a claim being made, it is possible to take action to make it less likely that any claim will be successful. Our advice how to do so is set out below:
When preparing a Will, our file contains notes of any meeting to discuss the content of the Will, and any meeting to sign the Will. This provides evidence of the presence of testamentary capacity, and can cover particular issues such as reference to a diagnosis of a dementia-type illness. In addition, the “Golden Rule” is that a medical report should be obtained at the time of making the Will where the person is elderly or infirm and there may be an issue with testamentary capacity. A GP’s report is inadvisable because:
- The GP may refuse to prepare the report
- The quality of the GP’s report may be lacking, for example giving an opinion on general mental capacity rather than specific testamentary capacity
- The GP may take a long time to prepare the report, which could delay the signing of the Will or result in a report which post-dates when the Will was signed
- The GP’s report may not carry much weight in Court if assessing testamentary capacity is not their area of expertise
Our advice is therefore for a specialist medical report to be obtained on testamentary capacity, and the additional cost will be money well spent in the event of a claim.
Knowledge and approval
Our file shows that a draft copy of the Will is offered to be sent out for approval, unless the preparation of the Will is urgent. There is then the opportunity to read and amend the Will prior to signing it.
Our file notes provide evidence as to the absence of undue influence, and can cover particular issues such as a potential beneficiary being present at a meeting. Part of this may involve us asking that other person to leave the meeting so that we can speak with the person who is making the Will alone. For a couple, it would be expected for them to attend a meeting together, and so where undue influence may be alleged, we may write to each spouse/partner separately with a draft copy of their Will; see each spouse/partner separately when it comes to signing the Wills; and write to each spouse/partner separately with a copy of their signed Will. There is then the opportunity for each spouse/partner to change their Will without the other being aware of this.
Our file notes can provide evidence of why the person making the Will has decided to exclude or limit the interest of a “natural beneficiary of the estate”, and from where such views originated.
Our file notes provide evidence that the person making the Will has never promised part of their estate to anyone who does not feature in the Will, on the basis that if such a promise were revealed then we would recommend including that person in the Will.
Our file notes provide evidence that the person making the Will has never made a mutual Will in the past with anyone, on the basis that if such an arrangement were revealed then we would recommend honouring it. For a couple, we include a clause within the Wills which states that the Wills are not intended to be mutual and so can be amended by either spouse/partner at any time, and specifically by the surviving spouse/partner.
Inheritance (Provision for Family and Dependants) Act 1975
The options here are:
- Do nothing, and simply run the risk that a claim may not be brought, or that any claim can be defended.
- Leave a gift to the person who is proposed to be excluded from the Will. This would need to be a realistic proportion of the estate rather than a token gift. The gift could be coupled with a “forfeiture clause” which would state that the gift would not be paid if the beneficiary made a claim against the estate. Whilst the forfeiture clause does not prevent the person making a claim, and the Court may reinstate the forfeited gift, it may act as a deterrent to making a claim on the basis that the claim may fail and the gift in the Will would then also be lost.
- Leave a Will in which the estate passes to what is known as a Discretionary Trust. This would define the potential beneficiaries as both the intended beneficiaries and the excluded beneficiaries. The whole point of a Discretionary Trust is that none of the potential beneficiaries are entitled to anything, but everybody can receive something. Who receives what and when is, as the name suggests, at the discretion of the Trustees. The Trustees would delay the distribution of the estate for a period of ten months from the date of the Grant of Probate, on the basis that this is the timeframe during which a claim can be made and served, and would then distribute the estate to the intended beneficiaries only. This may avoid a claim being brought if the excluded beneficiaries feel that they may receive something from the estate, or it can help defend a claim on the basis that the excluded beneficiaries cannot possibly know whether or not they have received adequate financial provision from the estate. There are two potential issues here. First, a claim is made against the value of an estate even if it is due to be held in trust. Second, the Court can, in certain circumstances, extend the usual deadline for bringing a claim.
- Set up a Lifetime Trust (that is, during lifetime and not in the Will) and transfer property, and possibly cash assets, to it in order to take those assets outside the estate. There are two potential issues here. First, a claim against an estate can take account of assets given away in the six years prior to death. Second, the Court can, in certain circumstances, vary the terms of a trust.
Letter or statement of reasons
In the event of a claim being made against an estate, the person who made the Will is not available to give their views. It may therefore be helpful to have a letter or statement setting out the reasons why the Will is phrased as it is. Whilst the words of the person making the Will are likely to be best, the danger is that a letter may contain information or opinions which would not be helpful. An alternative to a letter is a statement prepared with our assistance.
Whilst it is impossible to prevent a claim being made against an estate, taking account of the advice set out above could make it less likely that any claim will be successful.
The lawyer who is advising you will be happy to discuss any or all of the above with you.