The role of a Financial Director – a life in the spotlight
In the case of EJ (as attorney for DMM) and SD, the Court of Protection was asked to decide on the relevant test for establishing a person’s capacity to marry in circumstances where it would automatically revoke their will, and subsequently whether the requirements of that test were satisfied in this case.
DMM is a retired insurance broker in his mid-80s. He has been married once, divorcing many years ago. He has three adult children from that marriage. For the last 20 years, DMM has cohabited with SD, who is in her 70s.
In 2007, DMM executed an enduring power of attorney (EPA) appointing one of his daughters, EJ, as his sole attorney for property and financial affairs. In 2013, DMM executed an LPA for health and personal welfare in her favour.
On 11 December 2013, DMM executed a will which left the majority of his estate to his three daughters.
DMM is now suffering from Alzheimer’s disease; a diagnosis which is accepted by all parties.
In November 2016, DMM was taken by SD to have a capacity assessment to revoke his existing EPA, make a new EPA and to marry. SD had commissioned a report by a consultant psychiatrist, which concluded that DMM did not have capacity with regards to the EPAs, but did have capacity to marry.
EJ immediately entered a caveat at the Registry Office in the South West of England under section 29(1) of the Marriage Act 1949 in order to prevent any marriage between DMM and SD taking place. EJ also commission a second psychiatric report, which concluded that DMM lacked capacity to marry.
EJ then made an application under Part 4 of the Family Law Act 1996. The matter was transferred to the Court of Protection, which granted an interim injunction without notice stopping the proposed marriage. A hearing date was then set for the court to decide on a preliminary issue, namely ‘whether the legal test for whether a person has capacity to marry includes a requirement that the person should be able to understand, retain, use and weigh information as to the reasonably foreseeable financial consequences of a marriage, including that the marriage would automatically revoke the person’s will’.
The legal test for whether a person has capacity to marry is set out at sections 1-4 of the Mental Capacity Act 2005. The relevant part of these sections state:
The court considered the relevant authorities as presented by counsel for the parties, and concluded as follows:
Marriage automatically revokes a will (that is, unless it meets the requirements of a will that has been made ‘in contemplation of marriage’).
If an individual’s will is revoked upon marriage, and they do not get around to replacing it with another valid will prior to their death, then their estate passes under the rules of intestacy.
Under the 2013 will, SD was entitled to two thirds of his pension, a £300,000 legacy, and the right to reside at his property for two years following his death. The remainder of his estate was to be divided between his three daughters.
At the time of the hearing, DMM had assets of about £125,000 in cash, pictures worth about £40,000, and property valued at between £1,500,000 and £1,600,000.
Under the rules of intestacy, SD would be entitled to a statutory legacy of £250,000, his chattels and half of the balance of the estate. This amounts to roughly £950,000 to £900,000; over three times the amount provided for her under the 2013 will. The rest of DMM’s estate would then be divided equally between his daughters.
Outcome of this case
The Court of Protection’s ruling on the preliminary issue was clear: the fact that a marriage revokes a will is information that a person should be able to understand, use and weigh in order to have capacity to marry.
Following the preliminary hearing, EJ then applied to the Court of Protection for a ruling as to whether DMM does in fact have the requisite capacity to marry. The court was asked to consider the expert evidence of a consultant psychiatrist, who had been jointly instructed by the parties to undertake an assessment of DMM’s capacity to marry.
The consultant’s report concluded that "it was clear that DMM retained and understood the fact that we were discussing the potential consequences of his marriage to the First Respondent throughout the two hours or so of the interview. In particular he understood that his children might receive less than before and the First Respondent might receive more".
EJ made an application for the consultant to re-interview DMM in more rigorous conditions on the basis that SD had exude some form of undue influence over DMM and/or the consultant. The court refused this application, finding no to support such a claim.
Overall, the court was satisfied that DMM had at that time capacity to marry.
It is not yet known whether this case will be appealed to the Court of Appeal. As things currently stand however, DMM and SD are free to marry. The options available to DMM are:
The above is subject to a number of stipulations. Options 1 and 2 assume that DMM has the requisite capacity to actually make a new will. The test for establishing whether a testator has mental capacity to write a will was set down in the case of Banks v Goodfellow (1870).
Under the Banks v Goodfellow test, the testator must:
Whilst the Mental Capacity Act 2005 introduced a new test of capacity (as set out above), the general view of practitioners has been that the Mental Capacity Act 2005 test should be used to complement the Banks v Goodfellow test, but that it does not supersede it.
DMM would undoubtedly need to undergo a further assessment by a medical practitioner in order to establish whether he has the requisite capacity to execute a new will.
As his Attorney under the LPA for property and financial affairs, EJ might consider whether to apply to the Court of Protection for it to draw up a statutory will. In this situation, an Official Solicitor will be appointed look at the application from a completely independent perspective and make the representations to the Court to sort the necessary in order for the will to be fair to everybody concerned.
It is always worth bearing in mind that certain groups of people may be entitled to claim reasonable financial provision from a deceased’s estate under the Inheritance (Provision for Family and Dependants) Act 1975 (the ‘1975 Act’).
As a cohabitee of over two years, SD would be entitled to claim against DMM’s estate even if they weren’t married upon his death.
In deciding whether to make an order under the 1975 Act, the court must first decide whether the will of the deceased, or the laws of Intestacy, make reasonable financial provision for the applicant. Only if such provision has not been made will the court then look at whether and in what manner it should exercise its powers.
In this case, the deceased’s will left SD two thirds of his pension, a £300,000 legacy, and the right to reside at his property for two years following his death. It might therefore be argued that reasonable financial provision had already been made for SD, and she should not receive any more.
It might also be possible for DMM’s children to claim against his estate for reasonable financial provision, but only in the event that he was maintaining them at the date of his death.
For an explanation as to the key factors involved in bringing a claim under the 1975 Act, see Katherine Pymont’s video.
It is always very unfortunate when families become enthralled in bitter disputes. This case is particularly harrowing given that the person caught in the middle is suffering from a degenerative disease, and no doubt needs now more than ever the love and support of his family.
It is always hard to predict what the future will bring; and it is understandable that most people would never dream of finding themselves in situations such as this.
One of the best ways to avoid family feuds involving wills is to ensure that your affairs are in order, particularly if you are concerned about your health.
For more practical advice for avoiding inheritance disputes, please see Katie Allard and Kate Salter’s blog.
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