Challenging times for wills

22 May 2014

For many would-be inheritors, matters of inheritance matter! Will Aid’s 2012 survey revealed that:

  • 60% of 18-24 year olds would use an inheritance to buy a home;
  • 48% of 35-44 year olds would repay their mortgage; and
  • 40% of 45-54 year olds would use an inheritance to provide a pension.

The reliance upon inheritances is borne out by anecdotal evidence from some of my financial adviser friends. Adult children are factoring in their expected inheritance when assessing their future financial security and making plans. These days, some children cannot afford not to inherit.

With its emphasis on testamentary freedom, English law can quite easily thwart the hopes of expectant inheritors though. No surprise, then, that solicitors feel that disagreements over wills are on the increase, some of which may turn into full-blown disputes. This trend means that the will-making process itself will come under close scrutiny, as disappointed heirs call for evidence in order to weigh up the risks and benefits to them of challenging the last will. The will-making process is no place to cut corners if you want a will that will stand up in court.

One of the ways to challenge a will is to prove that the will-maker lacked testamentary capacity. This is always a fruitful source of case law as, while the leading case for assessing capacity in England remains the 1870 case of Banks v Goodfellow, certainly for pre-Mental Capacity Act 2005 wills, the nuances of what it means to be able to demonstrate testamentary capacity in the 21st century still need to be worked through.

In the recent Court of Appeal case of Simon v Byford and others ([2014] EWCA Civ 280), an elderly mother with mild to moderate dementia made a significant amendment to her will. Her new will did not give all her shares in the family company to her son, Robert. Thus the carefully laid plan of the old will, to give Robert the shares and thereby hand him a sizeable holding to help avoid disputes with his brother and sister was undermined entirely. The unfortunate circumstances of the will execution – mother signing a home-made will at her 88th birthday party at which Robert’s two other siblings were present but not Robert – probably did not help keep the matter out of court.

Robert argued that, as his mother lacked the capacity to remember the reason why her old will had been carefully written in those terms, she lacked testamentary capacity to make her new will. However, the judge declined to accept that argument, noting that capacity “depends on the potential to understand. It is not to be equated to a test of memory”. It was not necessary for the mother to comprehend the significance to Robert of leaving her shares unequally instead of equally. All that was required was that the will-maker understood the immediate consequences – that changing her will so that the children received equal shares meant that Robert would receive the same as his other siblings.

So it is not necessary for would-be will-makers to appreciate the “collateral consequences” of making changes to the distribution of assets in the will. However, anyone wanting to minimise the potential for costly disputes in future might conclude that it would be sensible at least to get out the previous will and record that a review of the thinking behind it was carried out. Best waiting until after the family party though.

Helena Luckhurst Author
Helena Luckhurst
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