An Iron Will: Dressing Your Will in a Bullet-Proof Vest10 May 2019 // Insights
In the words of Ambrose Bierce: "Death is not the end. There remains the litigation over the estate."
So, what steps can you take to prevent a claim against your estate by a disappointed beneficiary after your death? The simple answer is that nothing can actually prevent it and there is clear evidence of a steady increase in the number of challenges throughout the last decade. Such claims either seek the set aside of a will itself, often based on alleged lack of capacity, or a variety of other heads of claim such as undue influence or fraud, or proceed by challenging the reasonableness of a particular beneficiary’s inheritance, under the Inheritance (Provision for Family and Dependants) Act 1975.
Publicity surrounding the case of Mrs Ilott, which ended after several years in the Supreme Court as Ilott v The Blue Cross, has given adult children the largely false impression that they have a right to an inheritance and can challenge a parent’s will fairly easily if left out. Actually, the case changed little for such applicants who have no such entitlement, but that has not prevented an increase in the number of such claims, often rather speculative and optimistic in their merits.
In response to the variety of possible claims that can be made, there is an equal variety of actions that can be taken by those making a will to minimise the risk of any such claim succeeding. The most important advice is to get the will professionally prepared. The temptation to do it on the cheap by downloading a draft document, filling in the gaps and getting the neighbours over to witness it is understandable but, even if clear in its provisions and validly executed, the absence of professional advice tailored to circumstances such as those contemplated by this article - those where a claim is foreseeable – may mean that it in fact generates many times more in fees for the legal profession than would have been charged by a solicitor in doing the job properly in the first place.
Indeed, the simple fact that a solicitor has met you and taken your instructions can assist in defending a claim, especially one based upon lack of capacity. In Hawes v Burgess, Lord Justice Mummery said: "...it is, in my opinion, a very strong thing for the Judge to find that the Deceased was not mentally capable of making [her] will, when it had been prepared by an experienced and independent solicitor following a meeting with her; when it was executed by her after her solicitor had read through it and explained it; and when the solicitor considered that she was capable of understanding the will, the terms of which were not, on their face, inexplicable or irrational". He continued: "… the courts should not too readily upset, on the grounds of lack of mental capacity, a will that has been drafted by an experienced independent lawyer….".
Other important steps, often flowing from the above, include appointing at least one competent, professional executor, and submitting to a mental capacity assessment and report if you are elderly or unwell and your capacity could possibly be raised as a basis of challenge after your death, however unfairly. No retrospective old age capacity report prepared, in a litigation context, with information gleaned from medical records by an expert who never met you, could ever trump such evidence, a point also made by Lord Justice Mummery in the same case: “The court should be cautious about acting on the basis of evidence of lack of capacity given by a medical expert after the event, particularly when that expert has neither met nor medically examined the testatrix, and particularly in circumstances when that expert accepts that the testatrix understood that she was making a will and also understood the extent of her property".
Finally, preparing (with professional help) a letter of wishes setting out your rationale for the will’s provisions, especially if you are leaving someone out for reasons that reflect badly on them, will be very helpful to your estate in seeing off any challenge when you are no longer around to give evidence yourself.
One rarely-used, but potentially highly-effective method to dissuade a possible claimant is to leave them something in the will, but provide for the gift to fail in the event of a claim.
I was recently instructed by the adult children and residuary beneficiaries of their deceased father’s estate under his will. He had lived, unmarried, with his partner for many years having divorced his wife, the mother of his adult children. In his Will he left his estate as to 40% to each of his children and 20% to his partner. It was clear that he had foreseen problems arising after his death because he appointed independent executors and his will contained the following clause: “Any person who would otherwise benefit under my Will shall immediately be excluded from receiving any benefit and my Will shall take effect as if no provision had been made for the benefit of that person if that person…brings any claim under the Inheritance (Provision for Family and Dependants) Act 1975 in relation to my estate”.
The deceased’s partner instructed solicitors and threatened proceedings by sending a letter of claim. Neither act constituted the “bringing” of proceedings but issuing them in court would have done so. Unsurprisingly, she was keen to have a mediation before issuing her claim. My response, on instructions, was to point out that the issuing of a claim under the Inheritance Act would trigger the above clause and thus the loss of the bequest, which would fall into residue and increase my clients’ shares of the residue from 40% to 50% each.
In the absence of the clause, the 20% of the estate would have been ‘in the bag’ and the partner would simply have been fighting for more. She could have lost the case and had to pay the costs but her 20% would have more than covered that risk. The effect of the clause, however, was to remove the 20% from the ‘bag’ and leave her fighting from a position of no inheritance at all, needing to win at least 20% of the estate simply to get back to what the will gave her.
Finally, I informed the partner’s solicitors that my clients were not prepared to engage in mediation at this time but would be prepared to consider it after their client had issued and served proceedings, in other words, after she had forfeited the 20% of the estate left to her in the will.
No proceedings were brought, no mediation was required and the estate was distributed under the terms of the will.