Successful Application for a Statutory Will

One of our specialist lawyers reviews a recent case that has highlighted the circumstances in which an application for a Statutory Will can succeed.

The Case

The case of NT v FS (by his litigation friend the Official Solicitor) & Others [2013] EWHC 684 (COP) involved an application by a deputy (NT) on behalf of a 74-year old Alzheimer’s sufferer (F).

NT was appointed as F’s deputy on 21st June 2011 following a contested hearing. He made the application for the Statutory Will on 11th June 2012. He filed two witness statements in which he expressed a view as to the terms of such a will. He however remained neutral in the proceedings and in fact was excused from attending the final hearing, by the Trial Judge, in the interests of saving costs (because his witness evidence was so detailed).

The Parties

There were a number of Defendants to the claim, being the potential beneficiaries of his estate either as a result of his existing testamentary disposition (intestacy) or as likely successful applicants for provision from his estate upon his death.

F was the eldest of 4 children- his siblings were I, B and Q (5th, 6th and 7th Defendants). His Mother, T (9th Defendant), was 95 and residing in a residential home. His Uncle, L (8th Defendant), was the half brother of T and was 85 years of age.

F never married but had a long term relationship with C (3rd Defendant) which resulted in the birth of his son K (2nd Defendant). F also had a long term relationship with N (4th Defendant) which remained in place at the time of the hearing.

The Estate

F’s capital assets (“The Estate”) were valued in the region of £3.1 million but of this only £1.5 – £1.7 million was deemed distributable.

A Schedule of Income and Expenditure provided to the Court by NT indicated that F currently had an annual deficit of nearly £24,000. It was calculated that with a life expectancy of 12.5 – 13.9 years that F would need a sum of £196,000 to cover that annual income shortfall for the remainder of his projected lifetime.

The Dispute

There was no dispute that F lacked the capacity to make a Will and that it was in F’s best interests that such a will be made. There were a number of remaining issues in dispute between the Defendants including the potential provision they were due from the estate (if the Statutory Will was not made), the fact that some had given him unpaid help in relation to his business renovating properties and others had helped him with his affairs during his illness with one acting as his main carer since his 2006 diagnosis.

No executed will could be traced. A document purporting to be a Will was found, however, it was neither signed, witnessed nor dated (“the 1986 document”).

One of the main issues in the case, therefore, was whether the 1986 document was of “magnetic importance” in determining how the estate should be divided in accordance with section 4(6) of the Mental Capacity Act 2005.

The 1986 Document

The document purported to divide F’s estate as follows:-

Pecuniary legacies of:-

1) £20,000 each to I and Q

2) £10,000 each to K and B

3) £5,000 each to L and C

4) £2,000 to N.

The residue to T

The value of the estate in 1986 was in dispute (ranging from £200,000 to £400,000).

It was submitted by I, B, Q and L that this document was key evidence of F’s intentions regarding the percentage of his estate he sought to gift to each of the named beneficiaries. They sought to rely upon the fact that K received as much as B in the 1986 document but only half as much as I and Q and that this should be the starting point for the terms of the statutory will as it represented F’s wishes.

T agreed with most of this interpretation of F’s wishes and sought to rely on the 1986 document as evidence of “magnetic importance” that F sought to gift 82% of his estate to her.

F’s litigation friend (the Official Solicitor), K, C and N submitted that a significantly more cautious approach to the 1986 document should be adopted by the Court. They relied upon the fact that:-

  1. it was not a valid Will and if it was meant to be an expression of F’s wishes then he would have signed it and had it witnessed in the correct way;
  2. there was some hearsay evidence of a later Will which T tore up as she didn’t approve the contents;
  3. a lot had changed since the 1986 document was prepared including K growing from a child to a man and N’s relationship being more longstanding and one of F’s carer;
  4. the relationship between F and his siblings had changed since 1986; and
  5. T was now living in a care home so her needs had reduced.

The Judge’s Decision

The Judge made the following orders:-

  1. It is more probable than not that F thought the 1986 document was a valid Will;
  2. It is therefore a document within section 4(6) which must be considered by the Court in determining this claim;
  3. The 1986 document is important in evidencing that at that time F wished his siblings and mother to be included as beneficiaries of his estate but equally it is not a “magnetic feature” of the case nor should it be the starting point for the determination of F’s best interests in relation to the terms of the Statutory Will (the Judge reminding himself that the weight to be attached to F’s wishes and feelings will always be case-specific and fact-specific);
  4. He would proceed on the basis that the distributable estate was in the region of £1.5 million and that if it is likely to be significantly less then it would be possible for a further Statutory Will to be made;
  5. N had a potential claim under the Inheritance (Provision for Family & Dependants) Act 1975, amongst other claims, against the estate for the moral obligation owed to her by F as a result of their long relationship, his minimal contribution to the household when N was working and N acting as his sole carer since his diagnosis in 2006. The legacy to N in the 1986 document was of no assistance in determining the extent of provision for her in the Statutory Will. N was awarded 35% of the estate;
  6. He attached no weight to the relative percentage awards in the 1986 document for the remaining beneficiaries as matters had moved on very significantly since that time. Individually:-
    1. K had a strong moral claim as F’s only child and had a young family of his own. K was awarded 43% of the estate;
    2. I, B, Q and L (“S family”) had all made significant contributions to F’s wealth (some before and some after his diagnosis) and without those contributions the estate would be valued significantly less than it is. The Judge was prepared to attach weight to the 1986 document in so far as it evidenced that F recognised those contributions. I, Q and B were awarded 6.25% of the estate each and L was awarded 3.25% of the estate however these gifts were subject to a life interest to T outlined below.
  7. He accepted that there was a strong relationship between F and his mother and was satisfied from 1) the 1986 document and 2) the financial assistance that F had already provided to T, that he wished to contribute to her care. Further, the relationship between them was continuing- with N taking F to see his mother every week. He accepted that NT should pay T £50,000 as a gift from F’s estate- this being a payment due within 3 months and not payable upon F’s death. This sum was deemed to be sufficient to maintain T for another 4 years and if T and F survived another 4 years then it would possible to apply to NT for a further payment. The Judge accepted that the income from S family’s share was unlikely to provide sufficient to pay for T’s income shortfall upon F’s death so that T was also awarded an annuity of £20,000 per annum from S family’s share which will not commence for 4 years in the event that F dies before that date. If F dies after that date then the annuity will take effect on his death. This gift would lapse on T’s death.

Analysis

This case is therefore a useful indication of the importance which the Court will attach to the testator’s wishes, the complexity of the issues which can arise in such cases even when all parties agree that a Statutory Will should be made as well as the number of defendants who can become involved.

The latter issue in particular is of importance because the more defendants there are the more people that need to be satisfied if a case is to be settled before a final hearing- i.e. making it more likely that a final hearing will need to take place. This can increase costs significantly and often (at least in the absence of wrong-doing on the part of the parties) those costs will be borne from the testator’s estate. It is therefore important that the parties bear in mind throughout the litigation the extent to which the cost/benefit analysis of continuing with the case “stacks up” to the extent that the estate may be depleted in costs thus meaning the parties in fact have nothing left to fight over.

These consequences can be avoided to a certain extent by the parties making an offer of settlement which, if not beaten at the final hearing, could result in a personal costs order being made against those parties who refuse to accept it. It would be interesting to note the net position that each of these defendants found themselves in at the end of this case when the issue of costs and offers of settlement was factored into the equation to ascertain the extent to which it was in fact worth them fighting the case to trial.

If you wish to discuss the rules governing Statutory Wills with one of our specialist lawyers, or if you would like to make an application to the Court of Protection for a Statutory Will, then please call us on 01823 354545 for a free assessment.

Author: cpl

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