Recent tribunal cases involving Covid-19
Financial abuse of older and vulnerable adults is sadly becoming more prevalent.
Section 42(3) of the Care Act 2014 defines abuse as including financial abuse, and for that purpose financial abuse includes:
The Law Society accredits the increase in financial abuse to economic factors, social isolation, socio-cultural factors and advances in technology. The self-isolation and social distancing bought about as a result of the coronavirus pandemic can only have served to have heightened such factors.
Whatever the cause in the absence of a solution increased awareness is the first step in dealing with (and ideally protecting against) such abuse. For the purpose of this article we deal with the following types of financial abuse in relation to which we are seeing a significant increase in enquiries: (i) misuse of power of attorney; (ii) predatory marriages; and (iii) undue influence.
Misusing a power of attorney constitutes using such a power other than as intended or further than as limited by the document affording the power. More often than not such abuses see attorneys making decisions in their interests rather than in the best interests of the donor. The attorney may for example misuse the vulnerable individuals money or take out credit cards or loans in their name for their own benefit.
A lasting power of attorney is legal document designed to protect the maker enabling them to appoint a trusted third party (or parties) to act on their behalf in the event that they lose the capacity to make decisions for themselves. There are two types of lasting power of attorney – one covers health and welfare and the other property and financial affairs. A lasting power of attorney must be filed with the Office of the Public Guardian (“OPG”) while the maker still has full mental capacity.
Abuse of a power of attorney is generally revealed either on death of a vulnerable individual or at a point where a third party has sought to intervene by seeking the assistance of the OPG (who has a statutory responsibility for investigating concerns about the actions of registered attorneys and deputies) or the Court of Protection having becoming suspicious as to the actions of the attorney. In the case of the latter, if the evidential position is sufficient to support the concerns the likely outcome is that the power of attorney be revoked and a Deputy be appointed by the Court of Protection who then becomes responsible for the vulnerable individuals affairs (be it health and welfare or property and affairs or both).
In either case, once the abuse has been stopped urgent consideration will need to be given to the possibility of legal action been taken against the perpetrator. It may be necessary to report the attorney to the police for fraud or theft and/or pursue civil proceedings in an effort to recover and/or preserve the assets of the donor. Possible applicable civil action might be a claim for undue influence or a breach of trust and/or fiduciary duty claim and would extend to making an application for an injunction in order to prevent the perpetrator from disposing of, or dealing, with assets.
A Deputy would require authority from the Court of Protection to litigate on the donor’s behalf (it is often the case that the order appointing the Deputy will give them authority to investigate suspected financial abuse and if appropriate and in the best interests of the vulnerable person take action). Proceedings to recover misappropriated assets or for damages will most likely be pursued in the Chancery Division of the High Court.
The Daily Mail recently reported on the marriage of 91 year old Joan Blass to a 68 year old man less than 6 months before she died. Mrs Blass is said to have been suffering from severe vascular dementia at the time and could not even recall her new “husbands” name. That Mrs Blass had married at all only became known to her family, who are currently lobbying Parliament for greater protections for the elderly and vulnerable, several days after she died.
Under English law, marriage automatically invalidates a Will. This means all previous Wills are invalidated and the individuals estate is distributed under the rules of intestacy (which ordinarily take effect when somebody dies without a Will). Under the intestacy rules a surviving spouse is currently entitled to a fixed sum of £270,000 plus half of everything above that meaning that a marriage bought about solely for the purpose of financial benefit can result in a significant windfall for the surviving partner.
The capacity test for a person wishing to marry is fairly low – only a “rudimentary understanding” is required – but the parties do need to understand that marriage revokes a Will. The capacity test for making a Will is higher, the person making the Will must understand (i) the nature of the act of making a Will and its effect; (ii) the extent of his property; and (iii) the individuals for whom he is morally bound to provide and the consequences of not providing for such individuals. There is also the existence of what is known as the Golden Rule which provides that when a professional has doubts as to the capacity of the individual wanting to make a will a medical opinion should be sought.
The limited protections in place for a legal marriage pave the way for a vulnerable person to be “groomed” to have a relationship with the perpetrator who is solely financial motivated whether by access to money when they are alive or with the intention of inheriting their estate after they have died.
Undue influence can be seen in the context of putting pressure on a vulnerable person to change their Will, or to make gifts they otherwise would not when they are alive. Often the latter come to light when an estate is being administered and it transpires assets thought to belong to the deceased have in fact been transferred to other family members, invariably children. In some instances both lifetime gifts and the Will itself are open to potential challenge on the grounds of undue influence. The court takes a different approach to dealing with undue influence in the context of Wills to when dealing with life time gifts.
An undue influence claim in the context of a Will comes about when it is suspected that the deceased has done something that they might not have done had it not been for the influence of another. This is invariably the main beneficiary under the deceased’s current will or at least someone who is set to benefit considerably more than they were to benefit under a previous Will or intestacy.
In these cases the deceased’s own judgement has been abandoned having succumbed to the manipulative behaviour of another. In order to succeed, the claimant must be able to show that the deceased was coerced into making a Will, which in effect means that the person making the Will was influenced to the extent that their free will was completely oppressed.
Direct evidence of undue influence is unusual, given that the very nature of the act means that it happens behind closed doors hence these claims not always straightforward and successful cases of undue influence (that are reported) are few and far between.
The type of scenario most commonly seen is where one child benefits over other children and the decision is not supported by what were understood to be the deceased wishes prior to death. Another possible warning sign is where the primary giver, particularly of a vulnerable or elderly individual, benefits greatly from a Will. In these types of cases that person has often demonstrated a level of control over the deceased affairs in their lifetime. They might for example have made the appointment with a solicitor or will writer for the deceased to make a Will and given initial instructions on their behalf.
In the absence of sufficient evidence to prove undue influence in the context of a Will, prospective claimants may wish to consider whether there could be causes for the Court to state that the deceased did not know and approve the Will contents. Provided there are suspicious circumstances about how the Will came to be made, a claim for want of knowledge and approval may have higher prospects for success than a claim for undue influence.
A lifetime gift can be set aside due to either actual undue influence or presumed undue influence, the manner of proof being the distinction between the two.
Actual undue influence applies where there are overt acts of wrongdoing. The individual subject to the influence has been coerced or improperly pressured into doing something. For example the individual subjecting the influence may have made unlawful threats. Generally, the burden of proving an allegation of undue influence falls to the person claiming to have been wronged.
There is a presumption of undue influence for lifetime gifts where there is:
Once these requirements have been satisfied, the burden of proof shifts to the person seeking to uphold the transaction to show that on the balance of probabilities the transaction was entered in to by the influenced person independently and free from influence. If undue influence is proved then the transaction is declared void.
A significant gift made by an elderly and/or vulnerable individual, particularly where that gift is substantial in the context of the individual’s other assets is often a red flag in these types of cases. Gifts made to unexpected beneficiaries seemingly without good cause may also ring alarm bells, or to a close family member to the detriment of other close family members.
We act for trustees, executors, personal representatives, protectors, beneficiaries, charities and for individuals in a wide range of disputes involving estates, trusts and land.
If you require expert legal advice relating to any of the topics raised in this blog, please contact the author Katherine Pymont, or a member of our Wills, Trusts and Inheritance Disputes team.
Further information is available on our Wills, Trusts and Inheritance Disputes web pages.
Katherine Pymont is a Senior Associate in our Dispute Resolution team. She specialises in Wills, Trusts and Inheritance Disputes. Katherine's experience includes challenging the validity of wills (including claims for lack of testamentary capacity, want of knowledge and approval, fraud, forgery and undue influence), claims under the Inheritance (Provision for Family and Dependants) Act 1975, removal of executors and trustees, breach of trust claims, fraud cases involving trust structures and professional negligence claims relating to wills and trusts.
The Court of Appeal has recently handed down its judgment in the case of Hirachand v Hirachand, concerning an appeal against an order made in May 2020 in proceedings brought by Sheila Hirachand for provision from the estate of Navinchandra Hirachand, her late father, under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”).
Several stories have recently been published about the ‘legal battle’ commenced in the High Court relating to the estate of actor Terry Jones, who was well known and loved for his role in Monty Python and who died in January 2020. His adult children from his first marriage have reportedly commenced proceedings against their father’s estate and his second wife Anna Söderström (who is thought to be the main beneficiary of the estate), claiming that the Will their father made in 2016 is invalid because he lacked capacity when he made it. As a matter of law, a Will made by someone who lacks the required mental capacity at the time they made the Will is not valid.
Death does not release an individual from their debts and liabilities, nor does it allow transactions made to loved ones to escape challenge. This is so regardless of whether the transactions were made with the intention to defraud creditors.
Alzheimer’s disease, the most common form of dementia, has been in the spotlight recently given a recent scientific breakthrough with the US approving the first new Alzheimer’s drug in 20 years. Light has also been shed on dementia and assessing testamentary capacity in the recent case of Hughes v Pritchard  EWHC 1580 Ch. In this case, Mr Hughes, who suffered from moderately severe dementia was nevertheless deemed to have capacity at the time of amending his will by his GP, a view supported by a joint medical expert later instructed in the case. Despite this, his will was overturned by the judge on the basis that he did not have the requisite capacity to make the changes to his previous will, which were much more significant than the medical professionals, and indeed Mr Hughes, had appreciated.
Matthew & Others v Sedman & Others  UKSC 19
The Supreme Court recently handed down a judgment dealing with time limits in a “midnight deadline” case. The claim was brought by new trustees and beneficiaries of a will trust against the former professional trustees. The claim involved allegations of negligence against the former trustees, along with breach of trust and breach of contract.
Financial abuse of older and vulnerable adults is sadly becoming more prevalent
My previous blog examined whether Kenny Goss, the ex-partner of George Michael, may be entitled to a provision from the late singer’s estate, notwithstanding the fact that their relationship had broken down in 2009 (seven years prior to Mr Michael’s death). It was reported at the time that Mr Goss was seeking an award of £15,000 per month on the basis that Mr Michael had been financially maintaining Mr Goss at the time of his death. Pursuant to the Inheritance (Provision for Family and Dependants) Act 1975, Mr Goss made an application for reasonable financial provision from Mr Michael’s estate because he had not been left anything in the singer’s will.
In recent years the courts have seen a significant number of claims under the 1975 Act bought by adult children. This week it has been widely reported that the two adult daughters of Tony Shearer, a high profile banker and finance governor of a well-known public school, have failed in their attempt to bring a claim against their late father’s £2.2 million estate. Mr Shearer made no provision in his estate for his daughters leaving the majority of his wealth to his second wife.
Examining the impact of Sofer v Swiss Independent Trustees SA on practitioners in England and Wales.
This article was first published by STEP, December 2020: Katherine Pymont, 'Moments of Truth', Trust Quarterly Review (Vol18 Iss4), pp.36-41
Two recent decisions relating to forged wills have highlighted what evidence will be sufficient for a court to make a finding of forgery.
This quarterly contentious trust and probate litigation update provides a summary of a cross-section of reported decisions handed down in the courts of England and Wales in the period October 2020 - December 2020.
Beneficiaries often have questions and concerns over how the estate of a loved one is being administered but are sometimes kept in the dark by personal representatives (PRs). Under section 25(b) of the Administration of Estates Act 1925 (AEA 1925) PRs can be required by the court to provide, on oath, a full inventory of the estate and an account of what steps they have taken to administer an estate.
The High Court has recently given judgment in the case of Knipe v The British Racing Drivers’ Motor Sport Charity and Ors  EWHC 3295 (Ch), a summary judgment application concerning the construction of a will of a deceased racing driver, Mr Barrie Williams, who had sought to make several bequests to charity but the names of the organisations had not been correctly recorded.
One of the questions we are often asked is whether an individual’s will can be amended after their death if it doesn’t reflect their intentions. This is sometimes possible under a process known as rectification, although the circumstances in which rectification is available are limited. A claim for rectification was recently considered by the court at the end of 2020 in the case of Barrett v Hammond & others.
It has been alleged that the ex-partner of George Michael, Kenny Goss, may be considering issuing a claim against the singer’s estate. Goss was excluded from the singer’s Will but purportedly claims he is entitled to a monthly allowance of £15,000 as the singer provided this monthly allowance to him before their relationship broke down in 2009.
Before the Family Law Reform Act 1969 (“the 1969 Act”) came into force on 1 September 1970, the common law rules of construction that a child is legitimate only if the child was born or conceived in wedlock applied when dealing with trust deeds or wills. The 1969 Act is not retrospective so difficulties may still arise in relation to trust deeds or wills settled/executed prior to that time.
This blog focuses on two practical considerations that should be borne in mind when dealing with an estate where there are any suspicions that the value of the assets when realised may be insufficient to meet all debts and liabilities in full.
It is not uncommon in claims involving trusts and estates for one or more of the parties to be a child or other protected party. This is particularly true of claims under the Inheritance (Provision for Family and Dependants) Act 1975 and in cases involving trusts with minor beneficiaries. The procedures for litigation by or on behalf of a protected party are covered by Part 21 of the Civil Procedure Rules.
This article was first published by EPrivateClient on the 18th August 2020
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