Testamentary freedom – the checks and balances there

Does having a will in place give you testamentary freedom? Not necessarily, Paul Hewitt of Withers LLP writes on mondaq.com.

Testamentary freedom, he notes, is the right to leave your money and assets to whomever you want, and a fundamental principle of English law. However, that sense of control is not always well-founded nor is it necessarily a good thing when there are new developments tempering that freedom.

Hewitt lists the way in which people in England and Wales do not have as much control as they think.

Losing capacity

The most common issue is when someone loses their capacity to make decisions as a result of an accident or serious illness, such as dementia. The Court of Protection can make a statutory will on their behalf, which should be based on the person’s best interests, but it will often not reflect that person’s true wishes and feelings.

It is possible for the Court of Protection can rewrite a person’s will while they are still alive. This applies as well to people who have never made a will. Cases are usually anonymised to protect the incapacitated person’s identity. Hewitt quotes one case, Jones v Parkin, where the person had already died — Gladys Peek.

Gladys’ niece and great-niece had helped themselves to cars, jewellery and designer handbags from the money. The Court removed them from control of her money and approved a statutory will. The will listed the beneficiaries as two friends and a charity. As Gladys had never made a will, her niece and great-niece would have inherited the money according to intestacy laws.

Financial provisions claim

Other ways in which a person’s wishes can be overruled after they die include financial provisions claims. A dependent or close relative can claim that more provision should have been made for them. This will often apply in cases where a parent and child have become estranged.

Courts have wide discretion to decide someone has been unreasonable by not leaving anything or too little to their offspring. Hewitt quotes the case of Mrs Illot, who took her mother’s chosen charities to the Court of Appeal because her estranged mother did not leave her anything in her will.

Another financial provision case demonstrates the prevention of injustice. In the case of Bhusate v Patel, Mrs Busate argued against her late husband’s estate as she would have been left with nothing, as his will left everything to the children from his first marriage.

Forfeiture clauses

Making provision for people who have a reasonable hope of inheritance is wise, particularly if one couples this with a forfeiture clause, Hewitt says. A forfeiture clause sets out that the legacy will fail if the beneficiary tries to claim more.

There are also proprietary estoppel claims, which aren’t as common but tend to happen in farming families. Here, a person can argue that the deceased broke their promise to them, and they have relied on that promise to their detriment.

A case in point would be where a son or daughter helps run a farm thinking that they will eventually inherit the land, but instead it is left equally to them and other siblings who might never have shown any interest in the farm.

Provisions overridden

If someone is able to show that there was a promise and they took action because of that promise which was burdensome or otherwise detrimental, the provisions of the will can be overwritten.

Challenges to validity is the main way people obstruct wills, alleging undue influence, a lack of capacity on the part of the testator or even fraud. This often arises in cases where mental incapacity has set in. Professional will writers taking instructions and drafting wills need to take a great deal of care in such cases.

As probate trails are incredibly expensive, compromise will often settle disputes. There’s an element of risk in probate trials because the main witness—the testator—is dead, so protagonists often opt to settle cases out of court.

Jarndyce v Jarndyce

Hewitt warns of the common misconception that the costs will come out of the estate, quoting the case of Jarndyce v Jarndyce in Charles Dickens’ Bleak House novel, which centres on the long and drawn out fictional probate case where in the end the costs of the case consume the whole property.

It is much more common for the loser to pay the winner’s costs, as well as their own, making losing catastrophic. As costs aren’t always recoverable, winning isn’t the be all and end all either. If the deceased has ordered that a favoured child receive everything, that child is well advised to offer the estranged child something.

Those without deep pockets should think very carefully about letting their principles win over commercial analysis of the situation.

The above points, Hewitt notes, are a series of “imperfect checks and balances” that seek to preserve testamentary freedom and mitigate against abuse. Well-drafted wills, he adds, will be difficult to challenge. Testators should brief their adviser properly, explaining their reasoning for promises made or obligations owed, and if no-one with a financial interest is involved in the process of making that will, again this will help it withstand challenges after the testator dies.

Read the full article here. The above is not intended as legal advice and is only provided for informational reasons.

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