Contentious probate
Tuesday, February 22, 2011 at 12:53PM As a result of the economic downturn there has been a marked increase in the number of challenges on the Estates of those who have either failed to make a Will, or of those who have failed to include a relative or failed to leave enough provision for a dependant person. Charities often lose out and will take matters to the Court to establish entitlement under a Charitable Will. Large charities such as the RSPCA are able to take matters to the Court of Appeal in order to establish what the benefactor wanted to achieve by his or her Will.
There has been a significant ruling in the High Court recently (reported November 2010) whereby the RSPCA appealed a high Court judgment regarding a Will worth around £1M. A Mr Mason left a Will dividing his £1 M Estate between the Charity, two friends of his and his brother in law. The latter parties challenged at probate and claimed that Mr Mason wished to leave them his property in addition to the amount of money (£300,000) bequeathed to them in his Will.
The RSPCA disputed this. They noted that this would increase the amount bequeathed to over the current Inheritance Tax threshold (currently (£325,000). They argued that Mr Mason wished to bequeath the £300,000 to his family and friends and then leave the remainder to the RSPCA in order that no inheritance tax would be paid.
In February 2010 a High Court ruling sided with the individual beneficiaries thus reducing the RSPCA share from £651,000 to £370,000. The RSPCA appealed this ruling. It was contrary to the intentions of Mr Mason. The ruling meant a tax liability of more than £100,000 and the RSPCA claimed this was not the original intention of Mr Mason. The gift to Charity is free of Inheritance Tax liability and it would seem that Mr Mason intended for the RSPCA to benefit in the amount that the High Court awarded.
Another interesting RSPCA appeal case is Gill -v- RSPCA (2009) where at first instance the Court held that a Will which excluded/disinherited Mrs Gills only daughter and leaving everything to the RSPCA was invalid because it was established that it was the product of a lack of knowledge and approval of Mrs Gill and was entered into due to the undue influence of a domineering husband.
There has been a 33% increase in contested Wills over the past year. These are mainly launched in the high Court by children, spouses and other legal dependents who feel that they have not properly been provided for in either a Will or by the Law of Intestacy. The majority of these cases are settled out of Court mainly due to the prohibitive cost. Disgruntled beneficiaries who receive less than they feel they should coupled with far more complex family structures have led to this increase.
The moral of this is to make a clear Will. If you wish to leave someone capable of claiming out of your Will either leave a token amount to them or set out precisely why you are excluding them in the Will or in a “side-letter”. Be aware that step children do not automatically inherit if you do not make a Will whereas adopted children will. If you are raising step children make a Will at all costs, particularly if you wish to appoint Guardians of your own choosing or consider adopting them if it is possible. It is often a difficult subject to raise within families but in the long term it will prevent a costly Court case that may infact reduce what you leave to far less than your dependants deserve.
For further information on wills, trusts and probate please call Fiona Davies on 01432 278 179 or drop her an email on fd@kidwellssolicitors.co.uk
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