Contentious Trusts and Probate Round-Up: January 2018

7 February 2018

Raymond Allen James v (1) Karen James (2) Serena Underwood (3) Sandra James (2018)

The High Court has confirmed that the applicable test for assessing capacity to make a will after death is the common law test in Banks v Goodfellow (1870), which had survived the enactment of the Mental Capacity Act 2005 and remained the sole test for capacity in these circumstances.

In this case, the experts for the respective parties were in agreement that the testator at the time of making his will was suffering from Alzheimer’s disease, resulting in moderate dementia/ The experts considered that the first two limbs of the test in Banks v Goodfellow, namely that the testator had capacity to understand the nature and consequences of the testamentary act and he sufficiently appreciated the nature of the estate to which he was to dispose were satisfied. The experts disagreed over the third limb as to whether the testator had the capacity to appreciate the claims on his inheritance albeit each recognising that “the situation was not clear-cut” and the case was “one of very fine judgment”.

Mr Justice Matthews accepted that the testator suffered from “memory loss and confusion from time to time, and even some irrational behaviour” but that in considering the events before him it was his judgment that the testator had demonstrated a rational and balanced approach to the disposal of his estate. The claimant had already received land and money from the testator (his father) during his lifetime and the testator was entitled to seek to redress the balance between his wife and other children on his death.

The Claimant also sought to make out a proprietary estoppel claim that failed but in relation which Mr Justice Matthews commented that there does not have to be a level of proportionality between the level of detriment and the relief awarded. He said “Proprietary estoppel is a doctrine which, like the law of contract, focuses on expectations created rather than losses suffered. So if A promises B some property right, intending B to rely on this, and B does rely on it to B's detriment, the natural impulse is (as with contract law) to require A to make good the expectation. Making the remedy proportionate to the detriment suffered would be to focus more on what B has lost, rather than on what B expected to obtain”.

Various Incapacitated Persons (Appointment of Trust Corporations as Deputies), Re [2018] EWCOP 3

The Court of Protection has provided guidance on what is required for an assessment of the suitability of a trust corporation applying to the Court for appointment as deputy for incapacitated persons.

Mrs Justice Hilder identified the following information and undertakings as required for the Court to be satisfied that a trust corporation may be appointed:

  1. The proposed deputy (the trust corporation) is a trust corporation within the meaning of section 64(1) of the Mental Capacity Act 2005 and can lawfully act as such; and the trust corporation will inform the Public Guardian immediately if that ceases to be the case.
  2. The trust corporation will comply with the Public Guardian’s published standards for professional deputies.

i. The trust corporation is authorised by the SRA; OR                

ii. All the directors of the trust corporation are solicitors and it employs no one (save to the extent that it employs a company secretary); AND

iii. The trust corporation will retain its associated legal practice to carry out all practical work in relation to the management of the incapacitated person’s property and affairs; AND

iv. The trust corporation is covered by the professional indemnity insurance policy of its associated authorised legal practice on the same terms as that practice.

  1. The trust corporation will notify the Public Guardian immediately if there is any change to any of the matters set out in paragraph 3 above.
  2. The trust corporation undertakes that it (or where relevant its associated authorised legal practice) will maintain insurance cover that:

i. Covers the work of the trust corporation and

ii. Is compliant with SRA Minimum Terms and Conditions.

The trust corporation will lodge a copy of the insurance policy referred to in paragraph 5 above with the Public Guardian on appointment and will inform the Public Guardian immediately if there is any reduction in the terms or level of the insurance cover. 

Audrey Mary Sargeant v (1) Jane Louise Sargeant (2) Michael Arthur Thomson [2018]

The High Court has determined that the widow of a farmer who made an application for reasonable financial provision from her late husband’s estate, pursuant to the Inheritance (Provision for Family and Dependants) Act 1975, more than 10 years after the grant of probate was obtained was too late. Mr Justice Cooke said that the widow had accepted the provisions of the will by virtue of her conduct irrespective of the fact she was in financial difficulties. He said that at no stage had the material facts been withheld from her nor had she been misled by the trustees. Mr Justice Cooke said:

The reality is that Mary took her own decision to continue to work within the arrangements provided for by the will, rather than to explore whether she had any option available to vary them, in the full knowledge of the financial difficulties she was under, and maintained that decision over a very long period”.

For more information on this case see our blog “Time’s up! When does “late” become “too late” to make an application for provision under the 1975 Act?”.

Should you wish to discuss a disputed Will or Trust, please do not hesitate to contact our Wills, Trusts and Inheritance Disputes team.

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