Considering Gifts and Inheritance Tax
Kate Marsh | 04.11.2019
31.10.2019 Malky Chaloner
When it comes to considering the horrors of life and the risk of being haunted by poor decisions, an often overlooked area is the need to plan for death. It’s understandable as no-one likes to think about their mortality, but also clients often don’t realise the real harm that can be caused to families as a result of disputes about you from beyond the grave.
It is often difficult to give examples of the curse that poor estate-planning can bestow, owing to the confidentiality of people’s affairs etc. However, over the last couple of moths two published law reports set out real-life examples of all-out family warfare that one would wish to avoid.
Beryl Parsonage, was a former nurse, who died in November 2015 at the age of 86. She was survived by her four children and eight grandchildren, but after her death there followed a three-year legal dispute between her children. The law report is lengthy, but this summary will set out the key facts.
Beryl wasn’t particularly rich, she had a house (worth c. £225k), some savings (worth c. £165k) and then she also was likely to gain further monies of between £200 – 500k in future when land she had previously sold for development was in fact built on, although she had actually seemingly not realised these extra sums would come to her in due course.
The difficulty was that she had made a will in 2010 favouring one of her children, Duncan, as she believed that she had helped her other three children (Ian, Sian and Alison) with property purchases during life. In 2011, she decided to change her will so as to split her estate equally between her children. However, over the period 2010-2011 Beryl began to suffer with dementia and so the Court had to determine a ‘battle of the wills’, with different children seeking to support the 2010 and 2011 wills, and with Beryl’s capacity (ability to make a will) being pored over by the Court.
One can’t read the law reports without feeling sadness for the family. In Court the siblings claimed their brothers and sisters had caused their mother to change her will so as to benefit themselves, and they all disagreed about many facts. Beryl’s life was dissected with discussions about the extent to which she would lose her keys, bake cakes for family that weren’t needed and whether she was capable of writing well by January 2011. There was evidence from the Solicitor who had prepared her wills, they looked at her medical records and instructed two different consultants who had never met Beryl in life to give advice based on her medical records as to what she would have been able to do at various points.
Ultimately the Court found that whilst Beryl’s difficulties had begun before she made the 2011 will, it was valid and could be upheld and the estate should be divided equally between the children. The difficulty is that by now family relationships were clearly destroyed and Duncan (the son who had wanted the 2010 will to be effective), was ordered to pay the costs of his siblings in the amount of £152,500 so that given he would also have had to pay his own costs, he probably in fact inherited nothing.
Similarly, Anna Rea died in 2016 aged 85. She left four children (Rita, Remo, Nino and David), and had only one real asset, a house worth c.£750k. Again there had been two wills, one from 1986 which divided her estate equally between the four children, and one from 2015, which left the house only to Rita, with the will stating the reason for the unequal division as being that Rita had been her mother’s sole-carer for many years, whilst her brother’s Nino and David had not helped.
The Court heard evidence from the Solicitor involved, from Anna’s GP and also from the children. Sadly, the Judge describes the three brothers who were not benefitted in the will as claiming their Mother had a very poor level of English and that she did not know her own mind (facts not found by the Court), and also alleging their sister was a liar who had placed thoughts in their Mother’s mind. Ultimately, the Court found the 2015 will (leaving the house to Rita alone), to be valid.
Both these cases show the tragic consequences of family disputes after death. In both cases, Beryl and Anna had been to solicitors and in relation to Anna, her GP had also had a hand in confirming her capacity to prepare her will. Both cases though highlight the vital importance of doing one’s utmost to estate plan appropriately, seek proper legal advice and where appropriate medical corroboration of capacity. Neither case in fact involved the creation of Trusts or undertaking of tax planning, however arguably this may have been of assistance in these cases.
The Hallowe’en moral of the story – always seek good legal advice to ensure your family doesn’t create a scare story for future generations. Here at Moore Blatch, we’re always ready and able to assist and will do our utmost to ensure your straightforward wishes are upheld after your death, rather than causing ghoulish nightmares to persist for years afterwards.