Court disputes and costs arising: Someone is making a claim on the estate, what should I do next?

If there is a potential claim against the estate, the personal representatives must not take steps to distribute the estate. The claim should be fully investigated to determine whether it has merit. The personal representatives should consider early negotiation to try and resolve the issues. The personal representatives should keep the beneficiaries updated and try to obtain their permission to agree on any proposed compromise. If they are unsure whether to take a step, they can also apply to the Court for guidance and permission to take the steps proposed.

Do I have to go to Court to resolve a claim on the estate?

Most estate claims are settled without the need to go to court and will only result in a trial if a settlement cannot be agreed upon with the other parties. Avoiding going to court is beneficial for all parties, as once a claim goes to hearing, legal costs increase substantially, which ultimately leads to a reduction in the estate’s value.

You should consider early negotiation with the other parties in an attempt to avoid court proceedings. For example, parties will need to consider whether to make settlement offers and take part in alternative dispute resolution, such as mediation.

This can result in the matter settling more quickly and therefore helps keep legal costs to a minimum. However, if the case cannot be settled it may be necessary to issue court proceedings or continue with any proceedings already issued to progress the matter toward trial.

Once a settlement has been reached, your solicitor will need to consider how to conclude the proceedings by, for example, drafting a settlement agreement or preparing a deed of variation, which will detail how the estate is to be distributed.

Can I recover the legal costs of dealing with a dispute as executor?

Provided that it is reasonable to seek legal advice to resolve an issue, an executor may be able to have their reasonable legal costs reimbursed from the estate, before the estate is distributed to the beneficiaries.

This means that the costs involved in dealing with a claim against or involving an executor can result in reducing the amount of money a residuary beneficiary may receive from the estate. Therefore, these cost pressures may be used as a tactic to seek early resolution of disputes.

This content was originally posted as a guide to will and inheritance disputes produced by Sarah Atkinson, Ryan Taylor and Tom Dickinson for the National Will Register.

Trustee Charging Clauses: Can the Executor of a Will charge fees from the estate of a deceased?

Introduction

If a professional is appointed as the executor or trustee of a Will, they will want to include a charging clause. That charging clause should enable the professional to charge fees for their services from the estate. However, what if their profession does not qualify them to undertake the work? Much depends on the wording of the charging clause.

What is the scope of a charging clause?

In the recent case of Da Silva v Heselton [2021] EWHC 3079 (Ch), the Will in question contained a rather broad charging clause, which stated that:-

‘any of my Trustees who shall be engaged in any profession or business to charge and be paid … all usual professional and other fees and to retain and brokerage or commission for work or business introduced, transacted or done or time spent by him or his firm in connection with the administration of my estate or the trust powers or provisions of this Will or any codicil hereto including work or business outside the ordinary course of his profession and work or business which he could or should have done personally had he not been in any profession or business’.

The executor (defendant) sought to charge the estate for fees incurred while administering the estate, even though the business she was engaged in was unrelated.  The question therefore was whether the executor could rely on the charging clause to charge for business unrelated to the administration of the estate.

The outcome

The defendant’s appeal to be allowed her fees was dismissed.

It was held by Deputy Judge David Rees QC that the words of the clause did not entitle an executor or trustee to charge for work that falls out of the scope of their business or profession.  The Defendant asserted she had many different professional undertakings, but none of them involved the administration of estates. As such the fees she claimed were not her ‘usual professional and other fees’.

This case is a helpful demonstration that for an executor or trustee to charge fees from the estate, there must be a close connection between the business that the executor or trustee is carrying out, and the administration of the estate itself.  It also illustrates the restrictive interpretation of charging clauses, that is that if it does not clearly fall within the scope of the clause, then it should be considered to fall outside it.

How long do you have to bring a claim for more inheritance or dispute the validity of a Will?

A claim under the Inheritance (Provision for Family and Dependants) Act 1975 must be submitted to the court within 6 months from the date of a grant of representation or letters of administration.

If you miss the deadline, it is possible to make an application under section 4 of the Inheritance Act for Court permission to proceed out of time. The criteria which the Court will take into account are set out in the case of Re Salmon (1981). The Court will consider:

  • The length of the delay and the reasons;
  • Whether negotiations were begun within the time limit;
  • Whether the estate has been distributed;
  • Whether the Claimant has a remedy against anyone else (for example a professional negligence claim against their solicitors);
  • Whether the Claimant has a good claim.

A claim against an estate under the Inheritance (Provision for Family and Dependants) Act 1975 is brought where somebody is seeking an award from the estate where the Will or intestacy rules do not make reasonable financial provision.

You can read more about who can bring a claim for further provision and the factors the court will consider here.

This content was originally posted as a guide to will and inheritance disputes produced by Sarah Atkinson, Ryan Taylor and Tom Dickinson for the National Will Register, which can be found here.

I haven’t received what I expected under a Will, how can I claim further provision?

It is possible to bring a claim against an estate (whether there is a Will or not) under the Inheritance (Provision for Family and Dependants) Act 1975 for an award where the Will or intestacy rules do not make reasonable financial provision.

Who can bring a claim for more inheritance under the Inheritance  (Provision For Family And Dependants) Act 1975?

The following classes of people are eligible to make a claim from the estate:

  • The spouse or civil partner of the deceased.
  • The former spouse or civil partner of the deceased who has not remarried or entered a subsequent civil partnership, providing this is not precluded by the divorce order.
  • Any person cohabiting with the deceased as if they are a husband/wife for at least two years prior to their death.
  • A child of the deceased (includes an adult child).
  • Any person treated as a child by the deceased.
  • Any person who was being maintained by the deceased immediately before death.

What are the grounds to bring a claim for more inheritance under the Inheritance (Provision For Family And Dependants) Act 1975?

The court will consider whether the Will or intestacy makes reasonable financial provision for the applicant. When considering whether reasonable financial provision has been made, the Court will take into account the following factors:

  • the current and future financial resources and needs of the applicant and the beneficiaries of the estate
  • any obligations and responsibilities which the deceased had towards the applicant and the beneficiaries
  • the size and nature of the estate
  • any physical or mental disability of the applicant or any beneficiary
  • any other matter which the Court may consider relevant, for example any party’s conduct.

This content was originally posted as a guide to will and inheritance disputes produced by Sarah Atkinson, Ryan Taylor and Tom Dickinson for the National Will Register, which can be found here.

Administration of Estates, Removal of Executors and Seeking an Account

How long does an executor have to finalise the estate and how do I remove/replace an executor or administrator?

Generally, personal representatives (executors or administrators) are allowed 12 months to administer an estate without interference from beneficiaries or creditors. This is referred to as the executor’s year, but is not a rule set in stone.

If you are a beneficiary, you are entitled to apply to the court to seek the removal/replacement of an executor or administrator.

If a grant has not been taken out from the Probate Registry, an application can be made under section 116 of the Senior Courts Act 1981 to remove (or ‘pass over’) a personal representative and to appoint an alternative administrator. An application under section 116 can be made by any interested party, not just beneficiaries and creditors.

If a grant has been taken out from the Probate Registry, a beneficiary will need to apply to the court under section 50 of the Administration of Justice Act 1985 for the removal or replacement of a personal representative.


The executor/administrator is refusing to provide the beneficiaries with information about the estate – how can I get an account?

Personal representatives must keep estate accounts and these should be made available for inspection by a beneficiary or creditor on request. If this request is refused or if the accounts are not clear or accurate, then it is possible to apply to the court for an inventory and account order. The court can then order that the information be provided.

Where executors are not administering an estate, it is possible to issue a citation to encourage action to be taken. There are three types of citation. Read more here: What can I do if an executor is not administering an estate?

 

This content was originally posted as a guide to will and inheritance disputes produced by Sarah Atkinson, Ryan Taylor and Tom Dickinson for the National Will Register, which can be found here.

How can I get a copy of the Will?

Usually, a copy of a Will would be kept with the person’s important papers. If you cannot find a copy, then contacting the law firm that acted for the deceased is the best starting point. This may be a law firm that has acted for them in purchasing of property, family law cases or business advice. If you don’t know of any law firm or Will drafter that acted for the deceased, then you can try contacting their banks, as some still retain documents for customers.

The National Will Register also has useful search mechanisms. By conducting a Certainty Will Search, it will check to see if a Will has been registered on The National Will Register and in geographically targeted areas where the deceased used to live or work for Wills that have not yet been registered.

If you are still unable to find a copy of the Will, then placing a standing search with the Probate Registry is a good alternative. This can also be included when a Will Search Protect is conducted with The National Will Register. In England and Wales there is no individual that has an entitlement to see a Will except for the executors, until it becomes a public document either by probate being granted or a court claim being issued. A standing search with the Probate Registry will notify you if probate has been granted within six months of the search being placed and you will be sent a copy of the grant and Will at that time.

 

What can I do if someone won’t release the original Will to me and I am an executor?

If you know who has a Will, then you can issue a subpoena to have it delivered into court. There is no defence to the subpoena once issued, and it contains a penal notice so you can normally be sure that it will be complied with.

This content was originally posted as a guide to will and inheritance disputes produced by Sarah Atkinson, Ryan Taylor and Tom Dickinson for the National Will Register, which can be found here.

I was promised a share in a property but this was never written down. Is there anything I can do?

There are times when the ownership of property can be different from what it seems.  The legal owner of a property is the person whose name is registered at the Land Registry, but this may not tell the whole story of who owns a property. It is the beneficial ownership that sets out who actually owns the property and in what shares.

There may be formal paperwork setting out who the beneficial owners are (for example, where a property is purchased by one person who holds it on trust for another, under the terms of a clear trust document).  However, this is not always the case.

Co-habitants or family members who are helping each other out with a property purchase, often fail to put into writing the extent of their beneficial interest in a shared home or investment property. This can cause issues if the couple split, or when the property is sold or the legal owner of the property dies.  We are frequently approached by clients who want to realise their share in a property which is in the name of another person.

In such scenarios, there are a number of legal routes that can be taken to try and remedy the situation.

Constructive Trust (common intention between you)

If there is no written agreement then you may be able to argue that there was a “common intention” between you and the other party that you would be entitled to a share in the property. This is known as a constructive trust.

In order to prove this, you would have to prove;

a)That there was a common intention between you and the other party that you would have an interest in the property (this intention can be through something said or written, or inferred through actions);

b)That there has been a change of position on your part and that of the other party (for example contributing to the mortgage or paying for property renovations); and

c)That it would be unfair to prevent you having that share in the property.

 

If this intention is proven then the Court will decide your share based on any established agreement or by deciding what is fair based on all the circumstances of the case.

Proprietary Estoppel (a promise made to you)

If you were promised a share in a property and have relied on this promise then you may be able to make a claim to the Court that this promise should be upheld. This is known as proprietary estoppel.

In order to prove this, you would need to prove;

a)That a promise (or series of promises) was made to you, and the terms of that promise;

b)That it was reasonable for you to rely on the promise or promises that were made to you.

c)That you relied on the promise to your detriment (you normally have to show that you have suffered some kind of financial hardship (like contributing to the mortgage payments) as a result of the promise).

Where this is established the Court has a wide discretion and will usually award you what is considered to be fair to satisfy the promise or promises made.

Claim under the Inheritance (Provision for Family and Dependants) Act 1975

Cohabitants often face a problem when their partner, the legal owner of the property has died, and they do not stand to inherit the property.  If this has happened to you, it can mean that you are threatened with loss of your home at a time when you are already mourning the loss of someone close.  A cohabitant, or child in the same position, is entitled to bring a claim under the 1975 Inheritance Act for reasonable financial provision, which can include the provision of housing.

The Court decides such cases by looking at a variety of factors including your financial resources/needs of the Claimant, any other Claimants and the beneficiaries of the estate; any obligations/responsibilities of the deceased (including promises made to you about what might happen with the property, or what might happen on their death); the size of the estate;  any health needs you may have and any other relevant issues including conduct. The Court will balance these factors to reach a result, which can include the provision of property, or money to buy or rent somewhere else.

If you face any of the issues outlined in this blog and require assistance, Anthony Gold can help. Please contact any member of our Contentious Probate team.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

Will by WhatsApp: The Law Commission calls for modernisation of wills regime

The laws relating to the production of a valid will have remained unchanged since 1839. Under the present regime, a will needs to be written and signed by the “testator” as well as two witnesses in order to be valid.

In their long awaited report, published yesterday, the Law Commission has branded these laws “outdated” and called for a sweeping modernisation of the legacy regime.

They consider that the “need to comply with formalities can be a barrier to making a will”  and have suggested that audio and video recordings, electronic documents and oral statements should have the power to dispense and overrule a valid will.

They state that “a person who is seriously ill in the hospital may have more immediate access to a tablet or smartphone than to a pen and paper, and may be more able to speak than write”.

Under their proposals, judges in the High Court and County Court would have the power to decide on “the balance of probabilities” whether the text or recording is a valid expression of person’s testamentary wishes.

They consider that this power should operate retrospectively as “the date of the document may be difficult to discover in comparison with the usually straightforward question of the date of a person’s death”.

The effect of these proposals and the uncertainty created would certainly keep contentious probate practitioners busy for years to come.

In recognition of this, the Law Commission states that “the potential recognition of electronic documents could provide a treasure trove for dissatisfied relatives. They may be tempted to sift through a huge number of texts, emails and other records in order to find one that could be put forward as a will on the basis of a dispensing power”

They also acknowledge that “the large number of electronic documents that we store on our phone, tablets and computers may open up a variety of avenues by which probate could become expensive and contentious”.

Among their other proposals are a lowering of the legal age to write a will from 18 to 16 and a modernisation of the current test for testamentary capacity, known as the Banks v Goodfellow test, which dates back to 1870.

The Law Commission considered the language in this test to be “archaic” and that “recasting the test in a modern form would make it more readily understandable and therefore more easily applied”.

Their proposal is for the Mental Capacity Act 2005 be adopted as the test for testamentary capacity.

The consultation closes on 10 November and whether any of these proposals come into force, remains to be seen.

If you have any questions relating to a Will, Anthony Gold can help. Please contact 0207 940 4000.