The importance of making a will

The importance of making a will

A will is a legally binding document that manages and plans distribution of your assets, such as investments, money, property and possessions, upon your death. A will can also appoint guardians for your young children so that they are cared for should you pass away before them. Essentially, a will ensures that any wishes you have regarding the above are made known and expressed after your death. A will can also help to ensure your estate doesn’t pay any unnecessary inheritance tax.

What can I put in my will?

In your will, you can state:

  • who is to inherit your assets such as your possessions and money (also known as your estate);
  • certain individuals you wish to administer and distribute your estate (known as your executors);
  • who you would like to look after any assets left to children (known as your trustees);
  • at what age children become entitled to their inheritance;
  • any guardians to care for your children or elderly family members;
  • funeral wishes, such as a burial or cremation.

Why should I have a will?

Dying intestate

If you do not have a will in place, you will die ‘intestate’. This means that your estate will be shared and distribute under the ‘rules of intestacy.’ This means the rules will determine who is entitled to inherit and benefit from the estate. The rules are based on blood relations.

If you are married at the time of your death, and your estate is less than £270,000 everything passes to your spouse or civil partner. If your estate is worth more than £270,000 and you have children, the first £270,000 will pass to your spouse and the remainder will be split equally between your spouse and your children.

If you have no spouse, your estate will pass to your children. Your children would become entitled to their share of the estate at 18 which most people consider to be too young. By making a will, you can decide at what age you would want them to inherit.

If you do not have children or grandchildren, your estate will be shared between your parents in equal shares. If there are no surviving parents, ‘whole blood’ siblings will inherit and so on, moving down a list of relatives from ‘half-blood’ siblings to grandparents, aunts and uncles and if there is no surviving relatives to benefit the estate, everything is passed to the Crown.

Not only does this mean that your estate will be shared according to the intestacy rules, but it also means that the people responsible for administering your estate are nominated automatically, in a priority dictate by the rules. This may mean that the role of administering your estate may be left to someone who is not appropriate for the role and may be irresponsible or incapable of doing so. Having a will allows you to choose certain individuals you trust as executors or trustees.

Family disputes

A will can also limit the risk of any family disputes and arguments. The intestacy rules make no provisions for modern families and does not recognise stepchildren or cohabitees. This can lead to arguments and disputes amongst family members at an already stressful and upsetting time.

Appointing guardians

Having a will also allows you to appoint a guardian for your children under the age of 18. If you and your partner were to pass, it is important that you have a will which details who you would want to care for your children.. Additionally, having a will also allows you to leave inheritance to a child under the age of 18 which can be used to assist the guardians with the financial costs incurred in caring for your child.

Inheritance tax planning

In addition, having a valid will in place may mitigate your inheritance tax liability. As it stands, the standard Inheritance Tax rate is 40% and this is charged on the part of your estate that’s above the threshold of £325,000. Although there are certain reliefs and exemptions that you may qualify for, having a will can mitigate your tax liability. For example, leaving assets to your spouse or civil partner will be automatically exempt from inheritance tax and leaving property to your children and grandchildren can also reduce the inheritance tax due.

The importance of reviewing your will

After creating your will, we recommend reviewing your will every few years to ensure it remains up to date and reflects your wishes and especially when you go through big life changes or a significant change in assets. Both marriage and divorce have a significant effect on a will and when either life changes occur, you should consider updated or redoing your will. Equally, when there is a birth of a child, you should consider updating your will to appoint a trustworthy guardian for your children.

If you would like some more information about making a will we can help. Call us on 0800 988 7756 for a FREE initial chat.


testamentary capacity

Testamentary capacity - a case update

When making a will, the testator (the person making the will) must have testamentary capacity. If the testator does not have testamentary capacity, the will is invalid. The issue of capacity is unfortunately quite familiar to contentious probate solicitors and the court. The High Court recently looked at an interesting dispute over whether the testator had testamentary capacity, which we will look at in this article.

What is testamentary capacity?

Testamentary capacity is a term used to describe whether an individual holds mental ability. If the testator lacks testamentary capacity at the time of making and executing a will, then the will is not valid.

Banks v Goodfellow: the testamentary capacity test

The 1870 case of Banks v Goodfellow sets out the test for testamentary capacity. For a testator to have testamentary capacity, they must:

  1. understand the nature of the will and its effect;
  2. have some understanding of the extent of the property of which they are disposing under the will;
  3. be aware of the persons for whom they would usually be expected to provide; and
  4. be free from any delusion of the mind that would affect their dispositions to those people.

Mental Capacity Act 2005

The Mental Capacity Act (MCA) came into force in 2005 and has featured in many cases, alongside the test for testamentary capacity as set out in Banks v Goodfellow. Under the Act, a person lacks capacity if:

  • he is unable to make a decision for himself in relation to the matter because of an impairment of, or
  • a disturbance in the functioning of, the mind or brain.

A testator must be able to understand any information and be able to use this information to make and communicate their decision. If someone cannot do any one of these things, a Court will deem them to lack mental capacity.

Clitheroe v Bond

In the 2021 case of Clitheroe v Bond, the High Court looked at the test for testamentary capacity.

Jean Clitheroe had two children, Sue and John. Jean made two wills, one in 2010 and one in 2013. When Jean passed from cancer in 2017, her estate was worth somewhere between £350,000 – £400,000. In both wills, she left the entirety of her estate to her son, John. Jean omitted Sue from both of the wills entirely as she believed her daughter was a ‘shopaholic’ and a ‘spendthrift’.

John issued court proceedings to admit both wills to probate. However, Sue challenged this, claiming that the wills were invalid as Jean did not have testamentary capacity. This would mean that Jean died intestate (i.e. without a valid will in place) and therefore that Sue and John would share the estate equally.

The Deputy Master found that both the 2010 will and 2013 will were invalid. He found that Jean was suffering with “an affective grief disorder [following the death of her eldest child] within the meaning in Banks v Goodfellow” and therefore lacked testamentary capacity.

| The appeal

John appealed the decision and argued that the Deputy Master applied the wrong approach. John argued that the court should apply the two-stage test within the MCA to establish testamentary capacity, rather than Banks v Goodfellow. The Judge held that “it would not be in the interests of justice to permit this point” and stated that the “purposes of the MCA do not extend to determining where an individual had capacity to enter into a particular transaction that he or she had entered into”. The Judge confirmed that the test set out in Banks v Goodfellow has ‘withstood the test of time’ and was not replaced by the MCA. The Court confirmed that Banks v Goodfellow remains the precedent for ascertaining testamentary capacity.

Comments

The judgment and the comments made throughout in Clitheroe v Bond provide further transparency regarding the tests for testamentary capacity. The Court has confirmed that the test set out in Banks v Goodfellow remains “good law” and that the Mental Capacity Act has not replaced it. Although the MCA can be considered alongside, the Banks v Goodfellow test should still be primarily used for judging testamentary capacity.

If you would like to discuss making a will, or a dispute regarding a will, our team can help. Call Levi Solicitors on 0800 988 7756 for a free initial chat.


claim against wills and probate solicitor

Disputes over forged wills

Will forgery is unfortunately quite familiar to contentious probate solicitors and the court. The High Court recently looked at an interesting dispute over a suspected forged will, which we will look at in this article.

How would I know if someone has forged a will?

There are several factors that might lead you to believe that a will has been forged. These include:

  • the testator (the person making the will) has not included someone in the will that you would expect to be provided for, without reason
  • the will benefits an individual substantially more than others and/or excludes others
  • there are multiple wills that have been executed leading up to the testator’s death
  • the testator’s signature is strange or unrecognisable

What makes a valid will?

Before considering the position on forged wills, it is important to consider what makes a valid will. S9 Wills Act 1837 details the necessary elements needed for a valid will:

  1. The will must be in writing and signed by the testator or by another person in his presence and direction
  2. There must be intent to make a will; the testator must intend their signature to give effect to the will
  3. The signature is made or acknowledged by the testator in the presence of two or more witness at the same time.
  4. Each witness must sign the will and acknowledge his signature, in the presence of the testator (but not necessarily in the presence of any other witness).

Rainey v Weller

On 5 August 2021, the High Court handed down judgment in the case of Rainey v Weller. Deputy Master Linwood described the case to be ‘another sad and bitter family dispute concerning wills.

The Court considered whether the late Mrs Weller made one or two wills and whether she made each will with genuine intentions. The first will was made on 9 February 2018 and a second will was made on 5 March 2018. The court considered whether the March will revoked the February will.

In February 2018, Mrs Weller used solicitors Austin Ryder to execute her will. She expressed her wish to appoint Ann Rainey, her niece (and the claimant in the High Court case), as sole executrix and beneficiary of her estate. This February will was executed at the solicitors’ offices.

The First Defendant, Mr Paul Weller (Mrs Weller’s son), claimed that in March 2018, Mrs Weller asked him to prepare a will for her. On 5 March 2018, Paul claimed he did as he was instructed; obtained a template will online and filled it in on his home computer. He said he took a copy of the draft will and showed it to his mother. Paul told the Court that Mrs Weller read it and confirmed that this was what she wanted. This will appointed Paul as sole executor and divided the estate equally between Mrs Weller’s three grandchildren.

Following Mrs Weller’s death, Paul applied for Grant of Probate, using the second will. After seeing the second will, Ann instructed solicitors as she did not believe that the signature on the will was genuine, and she suspected someone had forged it. Ann issued proceedings and obtained expert handwriting evidence.

Judgment

The Judge heard numerous witnesses and took into consideration the handwriting evidence. He found that Paul had forged the March will and Mrs Well had not executed it.  The Judge provided the following reasons for his decision:

  • It would have been highly improbable that Mrs Weller decided to change her mind in less than a month
  • If she did decide to change it, it was most likely she would have returned to her solicitors who executed the February will.
  • Paul did not mention the second will to any other family member, and he was at the centre of the second will.
  • The handwriting expert evidence concluded that there was ‘moderate to strong evidence’ that Mrs Weller did not sign the March will and that someone had forged the signature.

As a result, the terms of the February will were upheld and Ann inherited the entirety of Mrs Weller’s estate.

What to do if you’re involved in a dispute over a potentially forged will?

It is important to gather as much evidence as possible. You should obtain copies of all previous wills and attain details of who witnessed the wills and where they were executed. It is also important to instruct a solicitor as soon as possible. A solicitor can advise you on your prospects of success. And if instructed early may be able to resolve the issue before it escalates into a claim, saving you time and money.

Templates of wills are available online and in shops. However, it is always better to instruct a solicitor to write a will for you. There are many advantages of using a solicitor to prepare your will. One of these is that it will reduce the likelihood of disputes regarding the will’s validity after your death.

If you would like to discuss making a will, or a dispute regarding a will, our team can help. Call us on 0800 988 7756 for a free initial chat.


manchester building society

Case update: Manchester Building Society v Grant Thornton

As a general principle in negligence claims, the court awards damages to put the claimant in the position that they were in before the negligence occurred. On Friday 18 June 2021, the Supreme Court handed down judgment for two cases. It is said that they are the most significant decisions on the scope of liability in negligence cases. The first of the two cases, Manchester Building Society v Grant Thornton UK LLP, is a professional negligence case. The other, Khan v Meadows is a medical negligence case. Although both cases appear unrelated and independent, the Supreme Court handed down judgment at the same time. This is because both cases are linked to what is known as the SAAMCO principle. We will look at Khan v Meadows in a separate article.

| The SAAMCO principle

The SAAMCO principle was established from the case of South Australia Asset Management Corporation V York Montague Ltd [1996]. This was a professional negligence case against a property valuer. It has become a crucial point in establishing the scope of duty owed by a professional. The SAAMCO principle confirms that in order to have a successful negligence claim, a claimant must show that their loss fell inside the scope of the defendant’s duty.

The SAAMCO principle applies to cases where the defendant’s advice to the claimant is essential in the claimant’s decision-making.  Each factor will determine the extent of the defendant’s liability in a negligence claim. The principle restricts recoverable damages to only the losses for which the relevant professional has assumed responsibility. It also establishes whether the defendant was giving the claimant direct advice or just information; established as an ‘advice case’ or an ‘information case’.  If a case is an ‘advice case’, the defendant has a full duty to advise the claimant against all the possible risks associated with taking the given advice. If a case is held to be an ‘information case’, the defendant gave only part information for which the claimant used to make a decision.

We look at the SAAMCO principle in this article.

| Manchester Building Society v Grant Thornton UK LLP

In Manchester Building Society v Grant Thornton UK LLP, the Defendant was a firm of accountants. The Claimant alleged the Defendants had provided negligent advice regarding the accounting classification for hedged mortgages. As a result of this negligent advice, the Claimant claimed losses of £32.7 million. The issue in question was whether this case was an ‘advice’ or an ‘information’ case; if the Defendant had provided advice, they would be entirely liable for the losses.

| First instance decision – High Court

In the first decision, the judge held that the Claimant was not able to recover the £32.7 million as this loss did not fall within the scope of duty principle established by SAAMCO. The judge held that the loss was as a result market forces, which was not the Defendant’s fault. The Claimant appealed this decision.

| Court of Appeal

Considering the appeal, the Court of Appeal decided that the judge had not accurately applied the principles in SAAMCO. The Court of Appeal held that this was an ‘information case’ and the losses sustained by the Claimant were not within the full scope of the Defendant’s duty of care. It considered that the Claimant could not prove that the loss would have not happened, had the advice given by the Defendant not been negligent. The Court of Appeal dismissed the Appeal. The Claimant then appealed to the Supreme Court.

| Supreme Court

On 18 June 2021, the Supreme Court overturned the decision of the Judge and the Court of Appeal. It held that the Defendant was indeed liable for the losses.

The Supreme Court stated that the court should dispense with the usual ‘advice case’ or ‘information case’ distinction. Whilst the Court acknowledged that some cases could be easily identified as an ‘advice’ or ‘information’ case, it felt that the distinction was misleading and there is often not a clear difference between the two. This moves away from the previous applications of SAAMCO. Further, from now on, Courts will not apply the ‘advice’ and ‘information’ distinction so widely when determining duty of care.

Instead of attempting to “shoe-horn” each case into an ‘advice’ or ‘information’ category, the Supreme Court held that it is more appropriate to objectively ask; what purpose was the advice supposed to serve? And what was the risk that the advice was intended to protect against? Put simply, was the professional advice intended to protect the any chance of the loss occurring? By applying six specific principles that stand as a framework for the scope of duty, (listed below) the Supreme Court implemented a more straightforward and coherent approach to establish the duty of care. Applying these principles, the Supreme Court held that the Defendant was liable for the losses, which were within the scope of its duty of care.

| Comments

The Supreme Court’s judgment on this case, as well as Khan v Meadows, will have a substantial impact on similar claims going forward. It will have a particular impact on how courts apply SAAMCO.

In professional negligence cases, the Court will now focus more on what the claimant had instructed the professional to do. As a client, it is a reminder to specifically consider defining what you have instructed a professional to advise on. The professional should review their terms and conditions to ensure that they specifically relate to their instructions, to avoid any disastrous outcome.

The Supreme Court suggested that in all questions involving potential negligent advice, the parties should address the following questions:

  1. Is the harm (loss, injury and damage) which is the subject matter of the claim actionable in negligence?
  2. What are the risks of harm to the claimant against which the law imposes on the defendant a duty to take care?
  3. Did the defendant breach their duty by their act or omission?
  4. Did the defendant’s act or omission cause the the loss for which the claimant seeks damages?
  5. Is there a sufficient nexus between a particular element of the harm for which the claimant seeks damages and the subject matter of the defendant’s duty of care as analysed at stage 2 above?
  6. Is a particular element of the harm for which the claimant seeks damages irrecoverable because it is too remote, or because there is a different effective cause or because the claimant has mitigated his or her loss or has failed to avoid loss which he or she could reasonably have been expected to avoid?

If you would like to discuss a potential professional negligence claim, our team can help. Call us on 0800 988 7756.


limitation in professional negligence

Case update: Limitation in professional negligence claims where barrister gives more than one advice

If you are bringing a professional negligence claim, you must do so within a strict time limit known as limitation. But if a solicitor or barrister gives two pieces of negligent advice on two occasions, when does the limitation period begin? We look at a recent case that looked at just this point.

Limitation in professional negligence matters

Limitation is the time that you have to issue any proceedings. This is to stop people bringing claims many years after the event. Therefore, before you issue your claim it is essential to ensure that your claim is not time barred. If you do not issue within the limitation period, the Defendant has a complete defence to the claim. This is sometimes referred to as ‘statute-barred’.

In professional negligence, the primary limitation period is six years after the date on which the cause of action occurs i.e. the limitation period begins to run on the date that the negligent advice was given.

Sciortino v Beaumont [2021] EWCA Civ 786

In this case, the Claimant brought a professional negligence claim against a barrister. He alleges that the Defendant barrister gave negligent advice on more than one occasion.

Background

The Claimant was made bankrupt in June 2007 as a result of a petition by the HMRC. The Claimant instructed the Defendant (the barrister) to advise on various bankruptcy issues in 2011. The Defendant first advised the Claimant in conference on 20 April 2011, then provided another advice on 26 October 2011.

The Claimant claims that the Defendant’s advice was negligent. As a result, and alleging professional negligence, the Claimant issued the claim on 25 October 2017. This was just within the six year period from the 26 October 2011 advice. The Defendant argued the claimant was out of time to issue the claim, and that the second piece of advice “gave rise to a new and separate caused of action.”

| The High Court

At the High Court, the Defendant successfully defended the claim. The Court struck out  the claim on the grounds that the Claimant had issued the claim out of the limitation period. The judge decided that the second piece of advice given did not give rise to a new cause of action and was merely “confirmatory,” provided within the first piece of advice given. Therefore, the limitation period had started running from the date of the first advice.

The Claimant appealed the striking out of the claim. This was on the basis that the second advice gave rise to a new and separate cause of action. This appeal was heard by Judge Jarman QC who confirmed that he agreed with the judge at first instance. He dismissed the appeal.

| Appeal to the Court of Appeal

The Claimant then appealed to the Court of Appeal. The Court of Appeal  overturned the earlier  decisions, allowing the Claimant’s appeal. It ruled that the Claimant had issued the claim relating to the 26 October 2011 advice within the limitation period.

The Court  acknowledged that if the Claimant wanted to bring a claim concerning the first piece of advice, he would be out of time. However, he ruled that the two advices were in fact “separate alleged breaches,”. The Court said, “there is no reason in law to conclude that the claim in respect of the second advice is statute-barred: it simply gives rise to a separate, albeit smaller, claim.”

The Court stated that when a solicitor or a barrister provides advice on two or more occasions regarding the same issues, if the limitation period expires on the first advice, the claimant may still sue them for the later advice. As a result of this, the Claimant’s claim continues. From here, the Court will consider whether the Defendant’s second advice was negligent and caused the Claimant to suffer a loss.

Key points

This case casts light on the difficulties in determining the starting point on the limitation period in professional negligence claims.

  • Where you are out of time to issue a negligence claim regarding the first piece of advice, you may still be successful in a claim regarding a second piece of advice given at a later date. Therefore, it is important to not focus solely on limitation for the first piece of advice given.
  • Sciortino v Beaumont is also a helpful warning to any potential Claimants not to leave issuing proceedings to the last minute. Issuing sooner rather than later can help avoid any limitation issues and confusion.

If you think you may have a professional negligence claim, it is important to speak to a solicitor as soon as possible. Call our professional negligence team on 0800 988 7756.