litigation about wills trusts and probate seminar 6/11/12

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Page 1: Litigation About Wills Trusts And Probate Seminar 6/11/12
Page 2: Litigation About Wills Trusts And Probate Seminar 6/11/12

Litigation about Wills, Trusts and Probate

Tuesday 6 November 2012

Page 3: Litigation About Wills Trusts And Probate Seminar 6/11/12

Litigation about Wills, Trusts and Probate Chris GreenwellScott McKittrickClaire HerbertNatalie Howes

Page 4: Litigation About Wills Trusts And Probate Seminar 6/11/12

what we want to tell you about

• The kinds of dispute which arise out of the preparation of Wills, Trusts and Probate

• Consequences of the failure to give enough thought to them when preparing the Will

• Consequences of the failure to make provision for the right people

• How these problems are put right after the event

Page 5: Litigation About Wills Trusts And Probate Seminar 6/11/12

these issues will be divided into:

• The right steps before death

• Common problems after death

• Starting a claim

• Miscellaneous types of case that happen

Page 6: Litigation About Wills Trusts And Probate Seminar 6/11/12

some overarching rules about acting on behalf of Estates

• Don’t write letters that might look bad later • If you have a case, get on with it• Advise objectively; sometimes the ‘hard word’

has to be delivered• Properly drafted Wills (or having Wills at all)

avoid claims• Keep a clear record of whatever you tell or

discuss with your client or their family• Plan in advance e.g. deal with affairs while

client/testator is of sound mind

Page 7: Litigation About Wills Trusts And Probate Seminar 6/11/12

when your client wants a Will • Clearly establish assets and liabilities • Find out clearly what the testator wants• Make sure the testator understands what

he wants• Keep clear notes of what you discuss

especially ‘off the wall’ plans • Make sure you get your client to get on

with it, especially if the client is approaching the end

• Go to the solicitor with your client

Page 8: Litigation About Wills Trusts And Probate Seminar 6/11/12

if you do prepare Wills have a checklist to make sure they are valid

• Comply with Section 9 of the Wills Act 1837 - signatures, witnesses, dates

• Make sure witnesses are not beneficiaries or spouses of beneficiaries

• Make sure the testator has capacity• Rectifying (putting mistakes in Wills right

later) is expensive and likely to give rise to negligence claims

Page 9: Litigation About Wills Trusts And Probate Seminar 6/11/12

after death; challenging the Will

• Failure to properly execute the Will• Intestacy • Prior Will prevails

• Undue influence, fraud or mistake

• Want of testamentary capacity

• Want of knowledge or approval; the court to be satisfied that the testator knew and approved the contents of his Will

Page 10: Litigation About Wills Trusts And Probate Seminar 6/11/12

failure to observe formalities

• Will must be written and signed

• Testator must plainly have intended to make his Will

• It must be witnessed by two witnesses together and signed or acknowledged by them in one another’s presence

Page 11: Litigation About Wills Trusts And Probate Seminar 6/11/12

undue influence

• Coercion of any variety; deprivation of freewill

• Presumed in some relationships; solicitor/client, doctor/patient, priest/parishioner

• Fraud • Lying to procure a disposition• Forgery of a Will (Harold Shipman for

example) • Impersonation of testator

Page 12: Litigation About Wills Trusts And Probate Seminar 6/11/12

want of testamentary capacity •Even after all this time, the test goes back to 1870 (Banks -v- Goodfellow)“It is essential that a testator shall understand the nature of his act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect and with a view to the latter object, that no disorder of the mind shall poison in affections, pervert his sense of right, or prevent the exercise of his natural faculties, that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which if his mind had been sound, would not have been made”

Page 13: Litigation About Wills Trusts And Probate Seminar 6/11/12

want of testamentary capacity

• Some examples of what does not necessarily affect capacity would be:-• Drunkenness• Deafness and dumbness; and• Loss of faculties after the making of the

Will

Page 14: Litigation About Wills Trusts And Probate Seminar 6/11/12

want of knowledge and approval

• This is where those who have ‘suffered’ try and establish that there are suspicious circumstances which ‘excite the suspicion of the court’

• Fertile ground for claims are:-• Person helping to get the Will executed

benefits• Part of the Will is covered up• Person benefiting fails to give evidence as

to execution

Page 15: Litigation About Wills Trusts And Probate Seminar 6/11/12

want of knowledge and approval

• There is misuse of a foreign language• Deaf and dumbness• Witnesses corralled by the principal

beneficiary • Any one dealing with the Will preparation

has to exercise the ‘golden but tactless rule’ which translated into plain English means ‘I am not sure you are all there so I am going to get a doctor to check’

Page 16: Litigation About Wills Trusts And Probate Seminar 6/11/12

you are not happy with the Will or issues in the Estate?

• What do you do?

• Citations • To take out Probate. This is to force proper

administration of the Will (for example in an intermeddled estate (Devastavit)

• A citation to force the taking of a Grant if someone should be administering an estate but will not

Page 17: Litigation About Wills Trusts And Probate Seminar 6/11/12

you are not happy with the Will or issues in the Estate?• To propound the Will or prove it in solemn

form - for example if the Will is suspicious the executor or beneficiary is forced to prove the validity of the Will

• Citations are rare in practice. They are slow and expensive and they in effect attempt to force the taking of action by people who have already proved unreliable

Page 18: Litigation About Wills Trusts And Probate Seminar 6/11/12

you are not happy with the Will or issues in the Estate?

• The more likely practical step is:-• Subpoena to delivery up Will • Subpoena parties likely to know about

the Will or its whereabouts; or• Proceeding by caveat and or litigation• Investigating execution of the Will ‘Larke

-v- Nugus’

Page 19: Litigation About Wills Trusts And Probate Seminar 6/11/12

caveats

• These are used to prevent a party taking out a Grant of Probate or letters of administration (in intestacy)

• They effectively block the estate until your issues are resolved or litigated

• If agreement is not reached in practice either:• The aggrieved party backs out of his claim

and withdraws the caveat; or• The aggrieved party gets on with the

argument about the estate

Page 20: Litigation About Wills Trusts And Probate Seminar 6/11/12

caveats

• Caveats can also be used to try and establish a contrary interest for example, the right to be administrator under an earlier Will or a claim of intestacy if the Will is invalid or if a Will cannot be found

Page 21: Litigation About Wills Trusts And Probate Seminar 6/11/12

after the Grant

• A common argument is the Trustee/Executor is not doing his job properly. Putting this right is a last resort. It is costly. The remedies (broadly in order of cost are)• Section 50 Administration of Justice Act -

Application to replace Trustee• Administration Action - to appoint a

completely independent administrator (similar to a court appointed receiver or insolvency practitioner) to administer the estate

Page 22: Litigation About Wills Trusts And Probate Seminar 6/11/12

after the Grant

• To appoint a Judicial Trustee. A Trustee appointed by the court.

• Application for ‘inventory and account’, to demand the Trustee accounts for what he has done with the estate’s money

Page 23: Litigation About Wills Trusts And Probate Seminar 6/11/12

revocation and rectification

• Torn up Wills • Crossed out Wills; interlination• Rectification - used to put a mistake or

fraud in a Will correct, or rectify failure of the Will draftsman to properly reflect the testator’s intent

• Construction claims - claims, often conflicting with rectification claims for construction of the words used in a Will.

Page 24: Litigation About Wills Trusts And Probate Seminar 6/11/12

costs • Legal costs are in 80% of claims the

‘elephant in the room’ • There are a number of broad rules to

remember in Probate:-• Costs are not always paid by the

deceased’s estate• If executors fend off a claim they will

usually get their costs paid by the estate• Any losing party (including executors) may

have to pay costs personally even though they are not arguing about their own money. This risk needs to be insured

Page 25: Litigation About Wills Trusts And Probate Seminar 6/11/12

costs

• Alleging fraud or undue influence is done at your peril; if you do so without good cause your exposure to costs is vastly increased

• Broadly speaking, it is always better to settle than fight by either:-• Mediation; or• Making an offer intended to shift costs risks

Page 26: Litigation About Wills Trusts And Probate Seminar 6/11/12

costs

• ‘No win, no fee’ (Conditional Fee) cases and insuring the risk of losing are always an option in contentious probate or inheritance act claims

• Claims should always be started by an informal Contentious Probate Protocol and there are cost sanctions for failing to do so

Page 27: Litigation About Wills Trusts And Probate Seminar 6/11/12

Inheritance Claims (Inheritance Provision for Family Independents) Act 1975 (IHA)

• A testator needs to understand the claims to which he ought to give effect (as the Judge said in 1870 in Banks -v- Goodfellow)

• This Act is how the law is used to provide for people who in simple terms, in conscience, should have benefited but did not from the testator’s estate

Page 28: Litigation About Wills Trusts And Probate Seminar 6/11/12

advance planning • A statement accompanies the Will which sets

out (with good reason) why provision is not being made or is limited

• Consider making reduced provision in the Will which may later render IHA claims commercially difficult to bring

• Mutual Wills which do not make proper provision are relatively easy to override

• Wills should not contain uncertain provisions for example ‘I leave x such amount as the court would award under IHA’

Page 29: Litigation About Wills Trusts And Probate Seminar 6/11/12

who is eligible?

• Domiciled in England and Wales• Claim to brought within six months of Probate• Spouse• Former spouse who has not remarried• A cohabitee • A child or person treated by the deceased as

a child (NB adult children must show dependency)

• Any person who immediately before the death was wholly or partially maintained by the deceased

Page 30: Litigation About Wills Trusts And Probate Seminar 6/11/12

what are they eligible for?

• For spouses; reasonable financial provision irrespective of need

• For everyone else; the provision needed for their maintenance

• The court can order maintenance payments, lump sums, property transfers, property orders as it sees fit and variations of existing orders

Page 31: Litigation About Wills Trusts And Probate Seminar 6/11/12

how does the court decide what is reasonable

• Likely foreseeable financial needs and resources

• Likely claims of any other party

• The needs of the beneficiaries

• The obligations of the deceased to the other parties

• The amount in the Estate

Page 32: Litigation About Wills Trusts And Probate Seminar 6/11/12

how does the court decide what is reasonable

• Any disabilities of the applicant or beneficiaries in the estate

• Any other matter including conduct which the court considers relevant

• In spouse cases:• Age and duration of marriage• Contributions made to the welfare of the

family

Page 33: Litigation About Wills Trusts And Probate Seminar 6/11/12

no shortcuts in assessing a case• Establish eligibility • Consider by reference to each of the

factors where the reasonable financial provision has been made

• If it has not been made what provision should be made?

• We do this in a checklist• The court gives weight to certain special

factors

Page 34: Litigation About Wills Trusts And Probate Seminar 6/11/12

no shortcuts in assessing a case• Promises made by the deceased • Statements made about provision by the

deceased• Conduct. You think this is likely to be

salacious but in practice it is very dull• Adult children cause particular difficulties• Spouses generally have much higher

reasonable financial provision needs

Page 35: Litigation About Wills Trusts And Probate Seminar 6/11/12

miscellaneous cases • Enforceable promises to leave property by

Will • Estoppel. A promise made to a beneficiary

by a deceased reneged upon in the Will• Murderers - cannot inherit. However other

killers can apply to benefit within three months of death

• Insolvent estates (note - freezing of assets in attempt to dissipation)

• Intestacy • Professional negligence ‘White -v- Jones’

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questions

Page 37: Litigation About Wills Trusts And Probate Seminar 6/11/12