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`Hopeless' estate claim

including wills and probate
Clitheroekid
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`Hopeless' estate claim

#408306

Postby Clitheroekid » April 30th, 2021, 12:08 pm

There is a huge amount of misunderstanding amongst not just the public but also amongst many lawyers as to the rights of adult children to inherit a share of their parents' estate.

In England, unlike many European jurisdictions, there is no `forced heirship' - a law that forces people to leave a share of their estate to their spouse or children. However, there is legislation in the form of the Inheritance (Provision for Family and Dependants) Act 1975 which allows certain classes of people - including spouses and children - to claim a share of the estate.

The rules are complex, but the fact that such claims can be made has given rise to a widespread belief that such claims are automatically successful. This belief has been bolstered by some successful claims making headline news, such as the case of Heather Ilott - https://www.dailymail.co.uk/news/articl ... -will.html Although the Appeal Court decision was reversed in the Supreme Court many people will have missed that judgment, and will have been left with the impression that this was the final ruling.

I have come across many such claims in practice when dealing with estates, many of which have no merit at all, and are purely speculative, usually run by lawyers working on a no win no fee basis. Unfortunately, because of the mythology that has grown up about this area executors are often far too willing to settle such claims, thereby feeding the sharks and adding to the mythology.

It was therefore very refreshing to come across the case of Shapton -v- Seviour, which was decided last year. The deceased's daughter sued her stepmother, to whom her father had left a very modest estate of £268k, and 80% of which was comprised in their house, for £237k, representing the large majority of his estate.

The stepmother suffered from motor neurone disease, and was reliant on state benefits. The daughter enjoyed skiing and boating holidays, and she and her husband both had good jobs with high incomes.

Unusually, the stepmother, who had to rely on free legal advice after her money to pay legal fees ran out, decided to fight the claim to trial, and the daughter’s claim was not only dismissed, but described by the judge as `absolutely hopeless'. He ordered her to pay the stepmother's costs.

I'd like to think that the case might deter others from making such greedy and speculative claims. Unfortunately, one swallow does not a summer make, and I suspect such claims will continue to proliferate. But for anyone facing such a claim at least the case can now be quoted by way of a deterrent.

There’s a good summary here by Alan Johnson, a retired solicitor who helped the step-mother defend the claim on a pro bono basis, and who deserves considerable praise for having done so - https://www.lawgazette.co.uk/commentary ... 30.article.

Dod101
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Re: `Hopeless' estate claim

#408320

Postby Dod101 » April 30th, 2021, 1:16 pm

Of course what we never know in these bald reports is the relationship as between a daughter of the deceased and the surviving step mother. The daughter no doubt thought she deserved some of her father's estate, instead of which it is all going to the 'incomer', the wicked step mother. I have a daughter from my first marriage and she and I have always been close, partly because she was an only child for 6 years, until her brother came along.

My first wife died and I remarried. My daughter's nose was definitely put out of joint, and it might well have come to something similar had I, as was to be expected, predeceased my second wife. As it is she died relatively early of a nasty blood cancer. I live in Scotland though and here children are entitled to 'legal rights' irrespective of dependency or otherwise. These consist of one third of the movable estate shared between all children of the marriage, and early in the winding up of the estate, they will be offered these legal rights. If there is a legacy for them in the Will, which exceeds these though, they are unlikely to take them up. They cannot have both.

There has been discussion about removing these legal rights in Scotland for some years but the system seems to work well enough and it certainly avoids the situation described by CK where there needs to be proof of dependency for any claim to succeed.

Dod

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Re: `Hopeless' estate claim

#408334

Postby UnclePhilip » April 30th, 2021, 3:14 pm

I am very grateful for this post, thank you Clitheroekid.

I remember the Ilott case at Court of Appeal, and feeling quite angry at what I thought was a perverse judgment.

It's good to hear that the Supreme Court settled the matter; and a good reminder not to take a judgment as final before it's run its full course....

My bedtime reading for the weekend is sorted!

https://www.supremecourt.uk/cases/uksc-2015-0203.html

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Re: `Hopeless' estate claim

#408336

Postby Lootman » April 30th, 2021, 3:17 pm

Clitheroekid wrote:There is a huge amount of misunderstanding amongst not just the public but also amongst many lawyers as to the rights of adult children to inherit a share of their parents' estate.

In England, unlike many European jurisdictions, there is no `forced heirship' - a law that forces people to leave a share of their estate to their spouse or children. However, there is legislation in the form of the Inheritance (Provision for Family and Dependants) Act 1975 which allows certain classes of people - including spouses and children - to claim a share of the estate.

The one circumstance where I might be wary of allowing a child of mine to inherit is the case you cited, where I deeply dislike their spouse and, moreover, think that that spouse might try and gain benefit through manipulation or guile. Although I am not sure I would be so churlish as to put a conditional clause in my will saying that my child will inherit only if and when she divorces her husband or he dies.

Out of curiosity, in the case cited, if the mother had instead gifted her entire net worth to those charities before death, would the daughter still have a claim under the 1975 act? Presumably against the charities?

Dod101 wrote:I live in Scotland though and here children are entitled to 'legal rights' irrespective of dependency or otherwise. These consist of one third of the movable estate shared between all children of the marriage, and early in the winding up of the estate, they will be offered these legal rights. If there is a legacy for them in the Will, which exceeds these though, they are unlikely to take them up. They cannot have both.

Echoing my question to CK above, only for Scotland, what is to stop a parent gifting all their money away whilst they are alive, to avoid the Scottish rule that compels parents to make provision for their children in their will?

Dod101
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Re: `Hopeless' estate claim

#408350

Postby Dod101 » April 30th, 2021, 3:57 pm

Lootman

I will leave the first question for CK or someone better qualified than I. As far as the Scottish situation is concerned, if seven years before death, someone had given away their entire movable estate that would surely thwart any claim by the child/children because of course there would be no estate upon which the child could claim. The parent could continue living in his house and if he had other property, presumably live off the rental income. In Scotland, we differentiate between real estate (for some reason not clear to me usually referred to as 'heritable property' and movable estate, that is cash, investments in the stock market and so on. I am not sure about investment property but it does not seem to me to be within the definition of movable estate.

Dod

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Re: `Hopeless' estate claim

#408352

Postby scrumpyjack » April 30th, 2021, 4:04 pm

In the case of the 1975 Act I think the writ challenging to the Will has to be made within 6 months of Probate. I was involved in such a case, which took over 4 years to conclude. The High Court judgement then effectively rewrote the Will. The claim is against the Executor and it is unlikely the Charities would have received anything by the time the writ was issued as the executor would have known what was coming.

Re the Scottish 'moveable assets' being divided. That excludes property which in most cases will be the bulk of the estate.

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Re: `Hopeless' estate claim

#408356

Postby Lootman » April 30th, 2021, 4:15 pm

scrumpyjack wrote:In the case of the 1975 Act I think the writ challenging to the Will has to be made within 6 months of Probate. I was involved in such a case, which took over 4 years to conclude. The High Court judgement then effectively rewrote the Will. The claim is against the Executor and it is unlikely the Charities would have received anything by the time the writ was issued as the executor would have known what was coming.

That almost sounds to me that the Executor should wait until 6 months after Probate before making such payments just in case there is a challenge.

Going after the Executor rather than the Beneficiaries is an interesting tactic. Although I would have thought in such a case that the Executor had done nothing wrong if he/she knew nothing about the impending challenge. And of course he may have no money to go after anyway.

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Re: `Hopeless' estate claim

#408360

Postby scrumpyjack » April 30th, 2021, 4:30 pm

Lootman wrote:
scrumpyjack wrote:In the case of the 1975 Act I think the writ challenging to the Will has to be made within 6 months of Probate. I was involved in such a case, which took over 4 years to conclude. The High Court judgement then effectively rewrote the Will. The claim is against the Executor and it is unlikely the Charities would have received anything by the time the writ was issued as the executor would have known what was coming.

That almost sounds to me that the Executor should wait until 6 months after Probate before making such payments just in case there is a challenge.

Going after the Executor rather than the Beneficiaries is an interesting tactic. Although I would have thought in such a case that the Executor had done nothing wrong if he/she knew nothing about the impending challenge. And of course he may have no money to go after anyway.


The Writ also includes the beneficiaries. Costs are met by the estate.

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Re: `Hopeless' estate claim

#408403

Postby Charlottesquare » April 30th, 2021, 8:40 pm

Lootman wrote:
Clitheroekid wrote:There is a huge amount of misunderstanding amongst not just the public but also amongst many lawyers as to the rights of adult children to inherit a share of their parents' estate.

In England, unlike many European jurisdictions, there is no `forced heirship' - a law that forces people to leave a share of their estate to their spouse or children. However, there is legislation in the form of the Inheritance (Provision for Family and Dependants) Act 1975 which allows certain classes of people - including spouses and children - to claim a share of the estate.

The one circumstance where I might be wary of allowing a child of mine to inherit is the case you cited, where I deeply dislike their spouse and, moreover, think that that spouse might try and gain benefit through manipulation or guile. Although I am not sure I would be so churlish as to put a conditional clause in my will saying that my child will inherit only if and when she divorces her husband or he dies.

Out of curiosity, in the case cited, if the mother had instead gifted her entire net worth to those charities before death, would the daughter still have a claim under the 1975 act? Presumably against the charities?

Dod101 wrote:I live in Scotland though and here children are entitled to 'legal rights' irrespective of dependency or otherwise. These consist of one third of the movable estate shared between all children of the marriage, and early in the winding up of the estate, they will be offered these legal rights. If there is a legacy for them in the Will, which exceeds these though, they are unlikely to take them up. They cannot have both.

Echoing my question to CK above, only for Scotland, what is to stop a parent gifting all their money away whilst they are alive, to avoid the Scottish rule that compels parents to make provision for their children in their will?


Probably nothing if they know when the event will happen (which is tricky), but of course the gifts might be challenged due to alleged undue influence, mental competence, etc, so care would need to be taken

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Re: `Hopeless' estate claim

#408405

Postby Charlottesquare » April 30th, 2021, 8:48 pm

Lootman wrote:
Clitheroekid wrote:There is a huge amount of misunderstanding amongst not just the public but also amongst many lawyers as to the rights of adult children to inherit a share of their parents' estate.

In England, unlike many European jurisdictions, there is no `forced heirship' - a law that forces people to leave a share of their estate to their spouse or children. However, there is legislation in the form of the Inheritance (Provision for Family and Dependants) Act 1975 which allows certain classes of people - including spouses and children - to claim a share of the estate.

The one circumstance where I might be wary of allowing a child of mine to inherit is the case you cited, where I deeply dislike their spouse and, moreover, think that that spouse might try and gain benefit through manipulation or guile. Although I am not sure I would be so churlish as to put a conditional clause in my will saying that my child will inherit only if and when she divorces her husband or he dies.

Out of curiosity, in the case cited, if the mother had instead gifted her entire net worth to those charities before death, would the daughter still have a claim under the 1975 act? Presumably against the charities?

Dod101 wrote:I live in Scotland though and here children are entitled to 'legal rights' irrespective of dependency or otherwise. These consist of one third of the movable estate shared between all children of the marriage, and early in the winding up of the estate, they will be offered these legal rights. If there is a legacy for them in the Will, which exceeds these though, they are unlikely to take them up. They cannot have both.

Echoing my question to CK above, only for Scotland, what is to stop a parent gifting all their money away whilst they are alive, to avoid the Scottish rule that compels parents to make provision for their children in their will?


Trusts have their uses re such scenarios. (Your first point)


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