BWB’s Charity Legacies, Trusts & Probate Disputes team continues to be busy with a wide range of legacy-related matters. Highlights this month include a new instruction in relation to a dispute with an executor over the wrongful distribution of a trust fund, and assisting a charity to review its legacy fundraising materials.
If you require any advice or assistance with any of your legacies, the team would be happy to hear from you. We offer a free initial ½ hour consultation.
Figures recently released by the Ministry of Justice show that the number of disputed legacy cases continues to rise, with the High Court hearing 178 probate disputes in 2014, up from 97 in 2013. This final Legacies Roundup of 2015 looks at some of the key cases that have been decided this year, and how they may affect charities and their legacy fundraising campaigns.
Ilott v Mitson - adult children
Perhaps the most highly publicised case of the year was the Court of Appeal decision in the long running saga of Ilott v Mitson. The case concerned a 43 year old woman who was awarded one third of her mother’s estate despite having been deliberately written out of her mother’s will in favour of charities.
Since the judgment was handed down this summer, there have been anecdotal reports of an increase in enquiries from estranged family members seeking to challenge legacies to charities. However, whilst the judgment was disappointing, charities should not despair: despite the wide reporting of the case and misleading commentary from some, Illot v Mitson has not fundamentally re-written the law, the case was decided on its very particular set of facts, and the decision certainly does not mean that all challenges by adult children will be successful in the future.
For a more detailed review of this case see our August edition.
Chekov v Fryer - cohabiting former spouse
One of the many factors often cited for the increase in probate disputes over the years has been the increase in the numbers of more complex family structures resulting from second marriages, divorces and cohabitation. Another dependency case heard by the High Court this year was the case of Chekov v Fryer.
The facts of this case were that Mr and Mrs Fryer had divorced in 1981. As is often the case, under the terms of the divorce both parties were barred from being able to make a claim against the other’s estate under the Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”) once that first person had died. An exception to this bar was where Mr Fryer and the former Mrs Fryer were to remarry.
At the time of Mr Fryer’s death, the former Mrs Fryer (now Miss Chekov) was again living with Mr Fryer as ‘husband and wife’, although they had not remarried. Although barred by the divorce agreement from making the dependency claim as a former wife, the court allowed Miss Chekov to claim under the Act as a cohabitee of Mr Fryer as she had been living with him for over two years up to the date of his death.
Although this case was very much decided on its facts, it is a timely reminder that challenges can come from what may at first seem like an unlikely source and could result in a modest increase in the number of claims made by those who, even after separation, remained living under the same roof as their former spouse.
King v Dubrey - deathbed gifts
The good news is that 2015 hasn’t been all bad news for charity legacies, as highlighted in the case of King v Dubrey (King v The Chiltern Dog Rescue on appeal).
In this case, Mr King claimed that his aunt had gifted her home to him prior to her death in 2011. However, her will made no mention of this gift, and the property therefore appeared to form part of the residue which Mr King’s aunt had left to be divided between several animal charities.
The High Court at first instance found in favour of Mr King, and as the property formed a substantial part of the residuary estate, the charities faced having their legacies all but wiped out.
The charities appealed that decision to the Court of Appeal, which, happily, overturned the High Court’s decision. The charities’ appeal was allowed on the basis that the alleged gift of property would have constituted a ‘death bed gift’ (or ‘donatio mortis causa’ in legal jargon) i.e. a gift made in anticipation of death, and one of the most significant exceptions to the otherwise quite rigorous restrictions and formalities required in the transfer of real property and the execution of wills. The Court of Appeal found that although Mr King’s aunt had been elderly, there was no reason why she would have anticipated her death in the near future meaning that there was no reason to depart from the usual requirements relating to property and wills. The judgment makes it clear that the courts require clear and unequivocal evidence of a death bed gift for it to be upheld, and that they should not be used as a substitute for making a valid will. This clarification is good news for charities.
Rawlings v Chapman - proprietary estoppel
Another (and increasingly common) type of challenge to charity legacies comes from claims in proprietary estoppel. One such claim was recently heard by the High Court in the case of Rawlings v Chapman.
By his will, Mr Hopkins left his residuary estate to horse charities chosen by his executor. Mrs Rawlings had previously been in a relationship with Mr Hopkins and claimed that, back in 1992, she had paid a substantial amount of money to build and fit out a new house on farmland owned by Mr Hopkins. Mrs Rawlings said that she did this in reliance on promises made by Mr Hopkins that "this will all be yours one day". She had interpreted this as meaning that he intended to leave the property to her on his death. As with the case of King v Dubrey above, the property was the main asset in the residuary estate.
As the court reiterated, proprietary estoppel arises where:
- an owner of property induces, encourages or allows the claimant to believe that he or she will enjoy some right over that property;
- in reliance on that belief, the claimant acts to his or her detriment to the knowledge of the owner; and
- the owner then seeks to take unconscionable advantage of the claimant by denying him or her the right or benefit which the claimant expected to receive.
If proprietary estoppel is made out the asset in question does not form part of the deceased’s estate and goes to the person it was promised to, whatever the will may say.
Here, the charities who inherited under the will were chosen by Mr Hopkins’s executor. They did not know the deceased directly nor know anything of the situation surrounding Mrs Rawlings’s claim. However, they properly investigated the claims and rightly defended the challenge.
The court found that Mr Hopkins had not said anything that constituted a promise or which had led Mrs Rawlings to believe that a promise had been made to leave the property to her. It therefore followed that Mrs Rawlings’s financial contributions to the property were not given in reliance of any belief that she would inherit it, and no proprietary estoppel arose. The property remained with the charities.
Although charities are understandably often reluctant to get involved in litigation, this case underlines the need for charities to carefully consider whether (and to what extent) to defend a challenge to a legacy, and confirms that in some cases they need to act robustly to defend these gifts.
RNID & Others v Turner- validity of a will
RNID & Others v Turner was a further challenge to legacies left to charity. This case concerned the validity of a 1999 homemade will of the late Dorothy Whelen, by which she left the bulk of her £1.8M estate to a close friend, Hazel Turner, and cut out four charities which were to benefit under Mrs Whelen’s previous 1982 will.
The charities contended that the 1999 will had not been validly executed as Mrs Whelen had not executed it in the presence of two witnesses, and also that Mrs Whelen, who was 80 years old in 1999 and increasingly forgetful, had not known and approved of the contents of the new will.
The court considered evidence from the alleged witnesses to the 1999 will as well as expert handwriting evidence. The witnesses gave evidence that they thought they were executing Mrs Turner’s will and that Mrs Whelen was not even present.
The court concluded that there were “features of the 1999 will that excite suspicion”. These included the fact that the will was homemade, prepared or obtained by the principal beneficiary (Mrs Turner), that there no evidence it was read over to Mrs Whelen, and it was not attested properly. The court concluded that it should not be admitted to probate and that the 1982 will should be instead.
The result was that the £1.8M estate would be distributed to the charities – a great outcome.
Looking to the future
These reported cases are just the tip of the iceberg. The frequency of challenges to charity legacies continues to increase, and the cases we have considered here highlight some of the problems charities may face. Although each case turns on its own facts, it will always be important to consider matters and take legal advice as soon as possible, so that challenges can be dealt with promptly and appropriately.
Given the rapidly changing fundraising landscape, charities are going to have to review and in some cases radically adapt their fundraising strategies. This will undoubtedly impact on the manner in which they undertake legacy fundraising. We will be reporting on these developments and letting you know what we think is in store in the New Year, so watch this space!
Posted on 17/12/2015 in Legal UpdatesBack to Knowledge