Probate Disputes and Remedies

Transcription

1 Probate Disputes and Remedies Third Edition Dawn Goodman Solicitor and Partner, Withers LLP Paul Hewitt Solicitor and Partner, Withers LLP Henrietta Mason Solicitor, Withers LLP

2 Published by Jordan Publishing Limited 21 St Thomas Street Bristol BS1 6JS Whilst the publishers and the author have taken every care in preparing the material included in this work, any statements made as to the legal or other implications of particular transactions are made in good faith purely for general guidance and cannot be regarded as a substitute for professional advice. Consequently, no liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in this work. Dawn Goodman, Paul Hewitt, Henrietta Mason 2014 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any way or by any means, including photocopying or recording, without the written permission of the copyright holder, application for which should be addressed to the publisher. Crown Copyright material is reproduced with kind permission of the Controller of Her Majesty s Stationery Office. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. ISBN Typeset by Letterpart Limited, Caterham on the Hill, Surrey CR3 5XL Printed in Great Britain by CPI Antony Rowe, Chippenham and Eastbourne

3 CONTENTS Dedication Brendan Hall deceased Preface Preface to the First Edition Table of Cases Table of Statutes Table of Statutory Instruments v vii ix xxiii xxxvii xli Part I Pre-Death Issues Chapter 1 Disputes Arising out of Lifetime Transactions 3 Validity of lifetime gifts 3 Capacity to make a gift 3 Practical considerations 5 Gifts made by an attorney or deputy 5 Other lifetime transactions 6 Undue influence 6 Presumed undue influence 6 Relationship between the parties 7 Nature of the transaction 7 Other factors 8 Rebutting the presumption 8 Actual undue influence 9 Other arguments for/against gifts 9 Deathbed gifts 9 The rule in Strong v Bird 11 Presumption against double portions 11 Joint ownership and resulting trusts 12 Presumption of advancement 13 Real property held in joint names 14 Joint bank accounts 14 Undue influence 16 Role of personal representatives 16 Chapter 2 Court of Protection 17 Statutory wills 17 Failure to execute and seal 17

4 xii Probate Disputes and Remedies Challenge to the statutory will 18 Death interrupting proceedings 18 Accounts 19 Authority to authorise gifts 19 Ademption 20 Part II Death and Burial Disputes Chapter 3 Coroners Investigations 23 Background 23 A reported death 24 The inquest 26 Further information 28 Chapter 4 Disputes Burial and Ashes 29 No property in a corpse 29 Method of disposal 29 The Deceased s wishes 29 Duty of disposal 30 Hierarchy of those with a duty to dispose of the body 30 Points to note and exceptions to the hierarchy 31 Parental responsibility 31 Householders and those lawfully in possession of the body 32 Local authority 32 Coroner s inquiry 32 Donation of body parts 32 Senior Courts Act 1981, s Conflicts between those equally entitled 34 Funeral expenses 35 Headstones 36 Exhumation 37 Practice and procedure 38 Part III Obtaining the Grant Disputes and Resolutions Chapter 5 Obtaining the Will 43 Securing the will 43 Witness summons 43 Last will or codicil 43 Previous documents 44 Proceedings already issued 44 Professional executors and advisers 44 Examination by the court 45

5 Contents xiii Chapter 6 Entitlement to the Grant and Applications to Remove Personal Representatives 47 Who may apply? 47 Actions against those claiming entitlement 47 Citations 48 Applications under SCA 1981, s 116 to remove personal representatives 50 Introduction 50 Main uses 50 Procedure 51 Applications under Administration of Justice Act 1985 (AJA 1985), s 50 to remove personal representatives 51 Introduction 51 Procedure 52 Intermeddling 52 What constitutes intermeddling? 53 Extent of liability 53 Chapter 7 Blocking the Grant: Caveats 55 Entering a caveat 55 Expiry and renewal 55 Warning and appearance 56 Withdrawing the caveat 56 Standing search 56 When to lodge a caveat 57 Doubt about validity of a testamentary document 57 Dispute about who should be personal representative 57 Where a citation is to be taken out 57 When a caveat should not be lodged 58 Chapter 8 Limited and Discretionary Grants 59 Introduction 59 Administration pending determination of a probate claim 59 Administration ad colligenda bona 60 Grant to part of the estate 61 Chapter 9 The Foreign Element 63 Introduction 63 English deceased: foreign assets 64 English wills and foreign wills 64 English executors and foreign assets 64 A formally valid will in a foreign jurisdiction 65 Other problems with foreign estates 68 Situs 68

6 xiv Probate Disputes and Remedies Identifying the assets and ownership structure 68 Tax 69 Foreign deceased: English assets 71 A valid will that can be proved in England 71 Who can take out the grant? 71 Material validity of the will 72 Matrimonial property 73 Practice and procedure 73 Part IV Problems with the Will Chapter 10 Rectification 79 What the court is required to ask 79 Clerical error 80 Failure to understand instructions 81 Burden of proof 82 The dividing line with negligence 82 Costs and independent legal advice 84 Procedure 84 Uncontested 84 Contested 85 Compromise and inheritance tax 86 Time-limits and protection for personal representatives 86 Personal representatives duties and disclosure of will-drafting files 87 Signing the wrong document 88 HM Revenue & Customs 88 Chapter 11 Construction 89 Background 89 Principles 89 Presumption against intestacy 90 Gifts to family 90 Presumption that a will is rational and not capricious 90 General rules as to evidence 90 Practice and Procedure 91 Resolving non-contentious construction issues 91 Resolving contentious construction issues 92 Costs 93 Chapter 12 Validity Disputes 95 Validity: essential elements 95 Due execution 95 Basic principles 95 Signature 95 Witnesses and attestation 96

7 Contents xv Presumption of due execution 97 Revocation 98 Burden of proof and presumptions 99 Testamentary capacity 100 Presumption of capacity 101 Proof of actual understanding or inference of capacity 102 Capacity at execution 103 The effect of drugs or alcohol 103 The effect of bereavement 103 Knowledge and approval 104 Reviewing the evidence 105 Solicitors benefiting under a will 106 Undue influence 107 Standard of proof in undue influence 108 Fraud 109 Fraudulent calumny 109 Forgery 110 Practice and procedure 110 Pre-claim investigations 110 Standing search 110 Caveat 111 Collating evidence 111 Further investigations 116 Joint or sole approach 116 Proceedings 117 Jurisdiction 117 Limitation 117 Pre-action 117 Commencement and procedure 118 Evidence about testamentary documents 118 Parties or persons who may be affected 119 Service of the claim form 119 Defence and counterclaim 119 Revocation of existing grant 119 Judgment in default 119 Discontinuance 119 Compromise 120 Mediation or conciliation 120 Settlement before trial 120 Costs 121 Part V Disputes in the Estate Administration Chapter 13 Claims against Personal Representatives 127 Introduction 127

8 xvi Probate Disputes and Remedies Accounts, inquiries and inventories 127 Application under the Non-Contentious Probate Rules 1987 (NCPR 1987) 128 Application to the Public Trustee 129 Application for accounts and inquiries or inventories 129 Disclosure and inspection of trust documents 131 The general position 131 Devastavit, breach of trust and fiduciary duty 133 Devastavit 134 Examples of devastavit 134 Breach of trust 136 Common breaches of trust 137 Breach of fiduciary duty 140 Action for devastavit, breach of trust or breach of fiduciary duty 141 Extent of liability 142 Defences to claims 143 On the merits 143 Section 27 of the Trustee Act Section 26 of the Trustee Act Court order 144 Section 61 of the Trustee Act Limitation 145 Doctrine of laches 147 Acquiescence or release by beneficiaries 147 Exclusion, exoneration or exemption clauses 148 Procedure 149 Pre-action procedure 149 Statements of case 149 Case management system 150 Detailed budgets 152 Disclosure 152 Evidence 154 Preparation for trial 155 Interim applications 156 Summary judgment 156 Security for costs 157 Pre-emptive costs orders 157 Injunctions 158 Specific disclosure and further information 159 Striking out 159 Removal and substitution 160 Application for removal or substitution of personal representatives 160 Action for removal of will trustees 161 Removal under s 41 of the Trustee Act 1925 or court s inherent power 161 Judicial trustees 162 Application for directions 163 Parties 164

9 Contents xvii Procedure 166 Costs implications 167 Costs 168 Costs capping 170 Beddoe orders: obtaining permission of the court to issue or defend proceedings 171 Action against a third party 171 Action against a beneficiary 173 Whole estate under attack 173 Action by a beneficiary 174 Procedure 174 Benjamin order 175 Procedure 176 Indemnities 176 Chapter 14 Disappointed Beneficiary Claims: Proprietary Estoppel and Constructive Trust Claims 179 Introduction 179 Why bring a claim? 179 Comparison 179 Principles of proprietary estoppel claims 180 Assurance made to the claimant relating to an interest in specified land 180 The claimant must reasonably rely on the assurance 181 The claimant must suffer detriment in consequence of that reliance 182 It must be unconscionable for the representor to go back on the assurance 183 Remedy 183 Principles of constructive trust claims 184 There must be evidence of agreement in a constructive trust claim 184 The burden is on the claimant to show that the beneficial ownership differs from the legal ownership 184 Remedy for a constructive trust claim 185 Procedure 185 Generally 185 Evidence 185 Compromise 186 Inheritance tax consequences 186 Chapter 15 Mutual Wills 187 Introduction 187 Definition of a mutual will 187 Effect of a mutual will 188 Evidential standard 188 Practice 189 Difficulties arising between the death of the testators 189

10 xviii Probate Disputes and Remedies Drafting 190 Chapter 16 Disappointed Beneficiary Claims: Claims under the Inheritance (Provision for Family and Dependants) Act Does the 1975 Act apply? 191 Domicile 191 Intention to abandon domicile of origin 192 Difficulties with the domicile as the basis of jurisdiction 192 Time-limit to bring a claim 193 Who can apply? 195 Spouse or civil partner of the deceased 195 Former spouse or former civil partner of the deceased 196 Any person living with the deceased as husband, wife or civil partner for 2 years immediately before the death 197 Child of the deceased 198 Treated by the deceased as a child of the family 198 Any person who immediately before the death of the deceased was being maintained by the deceased 198 The court s approach 199 Reasonable financial provision 200 Application by spouse or civil partner of the deceased 200 Other categories of applicant 200 Matters to which the court is to have regard in ascertaining reasonable provision 200 Additional factors 201 Orders that can be made by the court 202 Interim orders 202 Property available for financial provision 202 Sections 8 to 11 of the 1975 Act 203 Issues arising in relation to ss 10 and State benefits 205 Application 206 Claims by spouses and civil partners 206 The divorce hypothesis 206 Impact of ancillary relief cases on 1975 Act claims 206 Claims by other categories of applicant 210 Claims by former spouses 211 Claims by cohabitees 211 Claim by a child or someone treated as a child of the family 212 Estrangement 214 Treated as a child of the family 214 Claim by dependant 214 Practice and procedure 214 Pre-claim investigations 214 Pre-action conduct 215 Collating evidence 216

11 Contents xix Proceedings 218 Time-limit 218 Jurisdiction 218 Commencement and proceedings 219 Parties and joinder 220 Role of personal representatives 220 Service of claim form 220 Compromise 221 Who can compromise? 221 How to compromise 221 Taxation issues 222 Costs 222 Personal representatives costs 224 Chapter 17 Disappointed Beneficiary Claims: Fatal Accident Claims 225 Law Reform (Miscellaneous Provisions) Act Heads of claim 225 Recoverable benefits 225 Contributory negligence 225 Fatal Accidents Act Claimants 226 Heads of claim 226 Bereavement 226 Loss of dependency 227 Disregard of benefits 227 Contributory negligence 228 Interaction with Inheritance (Provision for Family and Dependants) Act 1975 claims 228 Chapter 18 Creditor Claims and Insolvent Estates 229 Payment of debts 229 Order of payment of debts 229 Insolvent or potentially insolvent estates 230 Methods of administration 230 Order for payment of debts on insolvency 230 Formal or informal administration 231 Protection for personal representatives 232 Trustee Act 1925, s Administration of Estates Act 1971, s 10(2) 233 Plene administravit 233 Trustee Act, s Practice and procedure 234

12 xx Probate Disputes and Remedies Chapter 19 Tax Evasion, Foreign Taxes and Criminal Matters 237 Disclosure to domestic authorities of information relating to tax and benefits 237 Enforcement of foreign revenue claims 240 Disclosure and other assistance to foreign revenue authorities 241 Domestic crime and money laundering legislation 242 International crime and money laundering 244 Part VI Claims against Professional Advisers Chapter 20 Claims against Professional Advisers 249 What claims may be made? 249 Claims against those drafting and advising in relation to wills, trusts and estate planning 249 A claim in negligence 249 Will drafting 250 Estate planning 251 Limitation period 252 Contractual claims 253 Claims against professionals for negligent advice to personal representatives/trustees 253 Claims in relation to costs 254 Solicitors Act taxation 254 Costs of taxation 254 Action for an account 254 Practice and procedure 254 Claims in against those drafting and advising in relation to wills, trusts, estate planning and estate administration 254 What claim to bring 254 Pre-action conduct 255 Commencing the claim 255 Mitigation 255 Rectification of wills 255 Equitable rectification 256 Mistake and Hastings Bass 256 Claims against professionals in their capacity as personal representatives or trustees 257 Claims in relation to costs 257 Pre-action 257 Commencing the claim 257 Time-limits 257 Case management and final hearing 258 Settlement 258

13 Contents xxi Appendix 1 Probate Disputes 259 Special contributions 262 Length of marriage 263 Non-matrimonial assets: property acquired prior to the marriage and inherited assets 264 Post-separation accrual 267 Treatment of marital agreements 271 Periodical payments, quantum and term 273 Appendix 2 Sample Documents and Materials 275 Sample 1: Subpoena requiring production of a testamentary document 275 Sample 2: Affidavit in support of an application under Senior Courts Act 1981, s 123 for the issue of a subpoena requiring the production of a testamentary document 276 Sample 3: Affidavit in support of application for appointment of administrator 277 Sample 4: Caveat 278 Sample 5: Warning to caveat 279 Sample 6: Affidavit of service of warning 280 Sample 7: Appearance 281 Sample 8: Application for standing search 282 Sample 9: Affidavit in support of application for grant ad colligenda bona 283 Sample 10: Claim form requesting court to decree probate of a will in solemn form in the context of a validity dispute 285 Sample 11: Claim form requesting court to pronounce against the purported last will of the deceased in favour of an earlier will on grounds of lack of validity 286 Sample 12: Witness statement of testamentary scripts 287 Sample 13: Letter requesting Larke v Nugus Statement 288 Sample 14: Letter requesting medical records 290 Sample 15: Letter to GP requesting views on capacity 291 Sample 16: Application for an account by executor under CPR Part Sample 17: Application under the Administration of Justice Act 1985, s 50 by executor for removal of co-executor 294 Sample 18: Witness statement in support of application under Administration of Justice Act 1985, s 50 by executor for removal of co-executor 295 Sample 19: Beddoe application 296 Sample 20: Application by surviving spouse under the Inheritance (Provision for Family and Dependants) Act Sample 21: Witness statement in support of surviving spouse claim under Inheritance (Provision for Family and Dependants) Act

14 xxii Probate Disputes and Remedies Sample 22: Witness statement of personal representative in reply to application under Inheritance (Provision for Family and Dependants) Act Sample 23: Checklist when taking instructions regarding claims under the Inheritance (Provision for Family and Dependants) Act Sample 24: List of documents to be collated for 1975 Act claim/defence 302 Sample 25: Heads of agreement on settlement of claim 303 Sample 26: Tomlin order (to which attach heads of agreement) 304 Index 305