Sore winners in the probate court
by Fiona Dodd, May 23rd, 2012
You don’t need to understand the intricacies of our legal system to know the loser of a court case usually pays the fees. But exceptions to this rule are becoming more common as courts try to discourage “no holds barred” litigation.
Many courts now penalise those who act unreasonably, even if they go on to win the case. This is spreading to the probate court. A recent example began with the death of a wealthy businessman who left his second wife a small amount and passed the bulk of his estate to his children from his first marriage.
The wife made a legal claim for a greater share. Negotiations began and the sons made an offer which she rejected. Eventually the matter came to the probate court. The wife won her claim, but was awarded less than the son’s original offer.
Generally, when the court agrees litigation was necessary to achieve a fair outcome, the costs of the claim are borne by the estate of the person who died. This is because it is seen as their responsibility to provide for their loved ones, and they have not done this adequately, so they should pay for putting it right.
One significant exception is when the person who makes the claim succeeds, but receives less than was offered during negotiations. Under those circumstances, the costs are paid by the person who pursued the litigation and incurred costs needlessly. It follows that in this case the widow should have paid all the costs.
However, the question was put before a specialist judge, who decided that the conduct of the children had not been beyond reproach either. Instead he ordered a proportion of the costs should be borne by the sons as a warning to others. The hope is that the real threat of financial penalties will encourage both sides to conduct themselves, and their negotiations, in good faith.
Writing a Will that will prevent this kind of litigation is certainly more challenging when you have a complicated family structure.
In 1958 there were fewer than 23,000 divorces. At the peak in 2003 there were more than 153,000. As divorced individuals remarry, form new relationships and age, the question of how to provide for the whole family in a Will becomes fraught with complications. It can be hard to separate personal feelings from the legal question of whether “adequate provision” has been made for everyone, but as this case shows, unless the Will gets the balance right, there are no winners.
The financial feud between the L’Oreal heirs
by Fiona Dodd, October 17th, 2011
The assets of Europe’s wealthiest woman, Liliane Bettancourt, were today placed under the control of two of her grandchildren, whilst her personal affairs are to be supervised by just one of them. A French court ruled the 88-year old L’Oreal heiress, who has reportedly been diagnosed with Alzheimer’s disease and dementia, no longer has the mental ability to manage her finances. This is the latest episode in a four year family feud and Mme Bettancourt’s lawyers are appealing the decision. At stake is the management of more than €16billion.
A similar situation could happen under English law. Here we have the Court of Protection which determines whether or not a person has the faculties to make their own decisions. If they cannot the judge appoints a Deputy to manage their affairs; mirroring the way that Mme Battencourt’s 25-year old grandson Jean-Victor Meyers has been appointed her guardian. The Court hears evidence from doctors and interested parties, which are typically close relatives. The judge uses that evidence to decide what the Deputy is authorised to do and how closely they should be supervised.
This process can take weeks, if not months and is costly. Once appointed the Deputy must report to the Court regularly and be supervised by representatives of the Office of the Public Guardian. If the Deputy needs to act outside of their given authority a further Court application is required.
Yet this process can be avoided. The Court of Protection should be a last resort if no other arrangements can be put in place. A Lasting Power of Attorney is usually the best alternative. This document allows a person to appoint one or more individuals to manage their affairs if they become incapable. There are two types of Lasting Power of Attorney. One deals with health and welfare matters, while the more common form manages legal and financial affairs. Neither requires official supervision. The person drawing up the document can simply decide who should be their attorney, and what powers they should have.
The legal fees of this argument may mean nothing to the Bettancourt family, but for most people a court application is an expensive option. A Lasting Power of Attorney can save time and expense. It also protects a person’s right to choose who should manage their affairs, instead of letting a judge take the decision for them.
By Fiona Dodd
Stieg Larsson unmarried partner disinherited
by Fiona Dodd, October 5th, 2011
At the date of his death Stieg Larsson was better known in Sweden as a campaigning journalist than a best selling author. He resembled his protagonist Mikael Blomqvist and feared the publication of his address if he married his long term partner Eva Gabrielsson as required by Swedish law.
Eva has now eloquently told of her troubles stemming from his death without a Will in her own book:http://www.guardian.co.uk/books/2011/oct/04/stieg-larsson-partner-eva-gabrielsson.
Whilst the reasons that they did not marry may be unique toSweden, their situation is sadly all too common. Over 60% of the population die without having made a Will. Marriages are at historic low levels. There are increasing numbers of blended or step-families. All of these can lead to an explosion in complicated situations on death.
Currently spouses/Civil Partners and children are all entitled to share the estate of a person who has died. Unmarried partners do not. They only have a right to ask for what is “reasonable for their maintenance”. That in itself can be difficult to determine at the best of times, even harder when a loved one has just passed away. If Stieg had been English, the situation would have been very similar in that his blood relatives would have received the whole of his estate, and Eva would have had to fight for a share. What is “reasonable for her maintenance”, is unlikely to be the same as what she may consider morally hers.
When the law on intestacy was written, it was generally assumed that the surviving spouse would be the parent of the deceased’s children, so that their funds would remain within the “blood family”. This is not always the case; warring step families can be bound together or close families torn apart by out of date legislation dealing with the money.
So what is the solution? Well, if getting married is out of the question, then a Will should be the bare minimum. After all, if you love someone enough to share a mortgage, or a pet, surely it is only fair to make it easier for them on your death?
By Fiona Dodd
When is it “safe” to exclude family from your Will?
by Fiona Dodd, April 2nd, 2011
An initially controversial story appeared in the papers this week (Daily Mail). Mrs Ilott who had been estranged from her mother, Mrs Jackson, for over 30 years except for a brief trial reunion over 10 years ago successfully claimed a share of her mother’s estate, despite Mrs Jackson having a valid will which left everything, valued at over £480,000, to charity.
At the time of making her Will, Mrs Jackson was very clear about her desire to leave her daughter nothing, and even left a letter with her will setting out her reasons, perhaps in the hope that this would prevent her daughter claiming a share. At no point was Mrs Jackson’s mental state questioned, nor was the validity of the Will.
At first glance, this looks to be hugely unfair. Why should Mrs Ilott receive money from a lady she appears to have hardly known? Why were her mother’s clear and understandable wishes set aside?
A closer look at the facts and the law may provide an answer. Many countries around the world have a regime of forced inheritance. Parents simply cannot disinherit their children, no matter how much they may want to. This is not the case in England and Wales, but, to compensate, the law does allow certain individuals who have been disinherited, or who have received too little to make a claim for more.
Children, even adult children, are entitled to claim. They might not succeed, but they have the right to try. The likelihood of success is based on a number of factors, not least the needs of the claimant. Put simply, if a wealthy child and a poor child of the same person launch identical claims, the poorer child may well have more chance of success.
Again, this doesn’t seem fair. But is it fair to ask the taxpayer to support someone when there is family money available. Do a parent’s obligations stop, just because you, sadly, don’t get along with your child? A court will look at all the evidence presented, and generally reach a just solution.
Could this have been prevented? Maybe. Mrs Jackson thought she had done all she could to show why she had cut her daughter out of her Will. Sadly that wasn’t enough. Perhaps however, the litigation could have been avoided if she had drafted her Will differently. The use of a trust might have been appropriate. Complicated family circumstances sometimes call for complicated Wills. It is important, not just to take advice, but to take advice from a specialist, such as a member of STEP, the Society of Trust and Estates Practitioners.
All our Wills are drafted by experts. We pride ourselves on taking the time to get to know our clients, and to look at their family circumstances, to ensure that we can address all possible risks, before it’s too late.