Beware confusion over family wills

Citation

Croxford, A. (2010), "Beware confusion over family wills", Strategic Direction, Vol. 26 No. 7. https://doi.org/10.1108/sd.2010.05626dab.002

Beware confusion over family wills

Article Type: Corporate law outlook From: Strategic Direction, Volume 26, Issue 7

The current economic climate has understandably resulted in many individuals focussing on matters of income and financial survival and not on the provision and security of their families on death.

However, even those that do make arrangements for the provision and security of loved ones may be surprised to learn that just because a will has been made their wishes may still be challenged and the final distribution of their estates altered.

For instance in a recent interesting case a woman (N) sought an order under the Inheritance (Provision for Family and Dependants) Act 1975 on the basis that the deceased (D) had not made reasonable financial provision for her in his will. The defendants to the action were D’s son (G) and his first wife (P) they were also appointed as executors under D’s English Will.

N had cohabited with D in his property for seven years prior to his death. N had given up her flat and her job and had enjoyed a luxurious lifestyle at D’s expense. D had two wills – a Spanish will and an English will. Under the Spanish will, N and G received equal shares in D’s apartment in Marbella with each share estimated to be worth £110,000. They also received shares in D’s £1m pension policy. However no provision was made for N under D’s English will.

The net estate under the English will was valued at over £2 m of which G was the residual beneficiary. N contended that the English will failed to make reasonable financial provision for her maintenance.

The judge found in favor of N and held that in light of N’s age, the length of time she had spent with D and the fact that he had provided for her and promised her security she was entitled to a reasonable degree of financial security and comfort for the remainder of her life.

Further in view of the fact that D’s family had become resentful and antagonistic towards N, the judge decided that a clean break was needed. In consequence the judge ordered D’s English property to be transferred outright to N together with a lump sum payment of £240,000.

It is also worthwhile considering the rules of intestate estates where a person dies without leaving a will. Under the rules of intestacy where a person dies leaving a spouse and children their estate passes as follows:

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  the spouse will inherit all the deceased’s personal belongings and will receive the first £250,000 of the estate;

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  the spouse will then receive half a life interest in the remaining estate (upon the spouse’s death this will pass to the deceased’s children in equal shares); and

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  the children will receive the other absolutely in equal shares.

Under the rules if the deceased has no spouse or children their estate will pass to their parents. In the absence of living parents their estate will pass to any living brothers or sisters.

The rules of intestacy do not make provision for partners that are not married to the deceased nor do they make provision for cohabitees or any other financially dependent individuals that are not specified in the rules of intestacy. In consequence, claims are also often brought by disappointed beneficiaries where estates pass under the rules of intestacy.

In another recent case a man (D) died without having left a will and in consequence his estate passed in accordance with the rules of intestacy. Under the rules of intestacy D’s partner (L) and cohabitee did not receive any financial provision on his death, instead the estate passed to D’s children.

L had lived with D for several years prior to his death; although she continued to use her father’s address for official correspondence and she remained on the electoral roll at his house. Following D’s death L brought a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”).

She did this on the grounds that she was a person entitled to bring such a claim as she had been living in the same household as D as his wife and was also maintained financially by D. D’s executors argued that L could not establish she was living with D as she still used her father’s address and, further, had failed to produce her bank statements which might have established that she paid D fully for residing at his home.

Despite the lack of documentary evidence there was sufficient corroborative evidence from witnesses to find that L had lived with D for a period of at least two years before his death. Further D had not only provided a roof over L’s head but had also paid for all the outgoings, holidays and clothes for L and they also looked after the children together. The judge therefore held that L was entitled to bring a claim under the Act.

Both of these cases clearly illustrate not only the importance of making a will but also ensuring that its contents are kept up-to-date, for instance incorporating any relationship changes and ensuring that provision is made for any person you believe requires such from you.

Disputes in relation to wills and estates cannot be completely avoided but the risk of such can be reduced significantly by a carefully drafted will by an appropriate professional. This message is not a new one but it has increased in importance. In addition, ensuring that your will is kept up to date, for instance by incorporating any provision for any new partners, cohbaitees or financial dependants, will minimise the risk of claims against your estate after your death.

If you wish to discuss the issues outlined in this article, or any issues around wills, probate or trusts then please contact Amy Croxford on 0113 2270241 or e-mail: amy.croxford@gordonsllp.com

Acknowledgements

Issued on behalf of Gordons LLP by fuse8. For further information please contact Rob Smith. Tel: 0113 284 0672; Mobile: 07840 677 534; E-mail: rob.smith@fuse8.com

Amy Croxford Contentious Wills and Probate Solicitor at Leeds and Bradford-based law firm Gordons, UK.