Trust, estates & will disputes

Inheriting when bankrupt
9 August, 2018

Bankruptcy can be stressful and confusing. If you inherit assets around the time you are bankrupt, what happens depends on the date of death and date your bankruptcy ends (‘is discharged’). Although bankruptcy shows on credit searches for several years, the discharge date is often one year after bankruptcy is declared; you can check if you have been discharged on the individual insolvency register. Your assets fall under the control of a ‘trustee in bankruptcy’ for the duration of the bankruptcy. 

 

You are the legal owner of an inheritance from the date the settlor dies. Even if the inheritance arrives after bankruptcy has been discharged, if the death occurred before or while you were bankrupt, it needs to be declared to the trustee in bankruptcy. If you are unsure whether you should be declaring an inheritance, it is best to do so. 

For example, if my uncle dies and leaves me £1,000 before or during the time I am bankrupt, even if I receive the money after bankruptcy is discharged, it belongs to my trustee in bankruptcy as it was part of my assets while bankrupt. The date of death is the date used (not the date I hear about the inheritance). I can only keep the £1,000 if I have been discharged before my uncle dies.

A bankrupt beneficiary must inform the trustee in bankruptcy about any inheritance they receive but executors are accountable too. Executors must check whether any beneficiary is bankrupt before distributing assets; if the executor does not check, and passes an inheritance to a bankrupt beneficiary, the trustee in bankruptcy can sue the executor for the value of what was passed to the beneficiary. Please contact Philip Youdan at Philip.youdan@cripps.co.uk. 

 

 

 


Appointment of new litigation friend
4 July, 2018

A ‘litigation friend’ is appointed to be a party to court proceedings when the person they are representing does not have the capacity to do so. The appointment of a litigation friend is rarely challenged, but has been done so in the recent case of Keays v Executors of the Late Parkinson [2018] EWHC 1006 (Ch) (8 May 2018).

The case of Flora Keays is well known: she is the severely handicapped child born from the affair the late politician Cecil Parkinson had with his former secretary Sarah Keays. Her father had provided for her during his lifetime, but these maintenance payments stopped two months after his death in 2016 and Flora was not a beneficiary of Cecil’s Will.

Sarah Keays issued a claim on Flora’s behalf as her litigation friend, under the Inheritance (Provision for Family and Dependants) Act 1975. However, the executors of Cecil’s estate sought to remove Sarah as the litigation friend as it was argued that she could not fairly and competently conduct proceedings on Flora’s behalf as she had an interest adverse to Flora’s, namely that she needed the maintenance payments to pay her mortgage.

There was a dispute over who should be appointed as Flora’s litigation friend. Sarah suggested three solicitors all with relevant expertise, but the executors objected to them all. The court considered whether the executors had shown grounds for removing Sarah as the litigation friend and found that, if Sarah could instruct a competent solicitor with relevant expertise, she would be able to fairly and competently conduct the proceedings. There was no evidence that she was not a suitable litigation friend within the meaning of CPR 21.4.

The master stated that, in his view, the court should be reluctant to impose a litigation friend on the parent or responsible person, and should only do so if there was no other viable candidate. The judge therefore made an order appointing Sarah’s preferred choice of solicitor as Flora’s litigation friend.

If you would like advice on appointing a litigation friend, or would like to make a claim against someone’s estate, please contact Phil Youdan on 01732 224 013 or philip.youdan@cripps.co.uk.

 


What happens if a Will is not properly witnessed?
8 June, 2018

To be valid, a Will must meet certain standard criteria which are set out in section 9 of the Wills Act 1837. If these criteria are not satisfied then the Will may fail, resulting in assets being distributed in accordance with an earlier Will (or, if no previous Will exists, under intestacy rules).

One of the essential criteria is that the Will is signed by the testator (the person making the Will) and this signature is made or acknowledged in the presence of two witnesses, who should then both sign the Will in the presence of the testator.

While you can make anyone a witness, it is often sensible to ask someone independent to witness your Will, as a Will cannot make a gift to either of the two witnesses (the Will is valid but gifts to witnesses will fail). This means that family members may not be the most appropriate witnesses.

If a Will is not properly witnessed it is likely to be invalid and fail. For this reason it is worth making sure your Will is prepared and executed properly, to ensure your wishes can be carried out. If you are concerned about a Will and wish to dispute whether it is a valid Will, one approach is to investigate whether it has been properly witnessed by taking statements from the witnesses named in the disputed Will.

If you think a Will which is being used to distribute someone’s estate is invalid, contact Phil Youdan at philip.youdan@cripps.co.uk or on 01732 224 013 to discuss the options available to you.

 


Claiming part of an estranged spouse’s inheritance
7 May, 2018

If a couple separate but do not divorce, their finances continue to be linked until either a divorce or separation agreement (which divides finances in a binding agreement) is finalised. Even finances built up after separation can be treated as joint assets.

While delaying a formal divorce may seem the easier path, it can lead to adverse financial consequence if divorce takes place at a later date or if one of the spouses dies before divorce. In this Blog,

we look at the latter scenario.

The first point to make is that if you are legally married to someone at the time of your death and have no Will (this is known as being intestate), your spouse will inherit a large portion (if not all) of your estate under the intestacy rules.

Even if you have made a Will, your spouse could seek to challenge this under the terms of the Inheritance (Provision for Family and Dependents) Act 1975. Under the 1975 Act your spouse, even if you have been separated from them for a long time, could seek to claim part of your Estate (see here for more details).

It is important to understand that whilst a former spouse who has not remarried can bring a claim under the 1975 Act, such claims are generally more restricted than claims by current spouses.

If you think you may have a claim against an estranged spouse’s estate, or you want to protect an inheritance you have received (or are expecting) contact Phil Youdan at philip.youdan@cripps.co.uk or on 01732 224 013 to discuss your options.


What happens if a Will is not properly witnessed?
23 April, 2018

To be valid, a Will must meet certain standard criteria which are set out in section 9 of the Wills Act 1837. If these criteria are not satisfied then the Will may fail resulting, in assets being distributed in accordance with an earlier Will (or, if no previous Will exists, under intestacy rules).

One of the essential criteria is that the Will is signed by the testator (the person making the Will) and this signature is made or acknowledged in the presence of two witnesses, who should then both sign the Will in the presence of the testator.

While you can make anyone a witness, it is often sensible to ask someone independent to witness your Will, as a Will cannot make a gift to either of the two witnesses (the Will is valid but gifts to witnesses will fail). This means that family members may not be the most appropriate witnesses.

If a Will is not properly witnessed it is likely to be invalid and fail. For this reason it is worth making sure your Will is prepared and executed properly, to ensure your wishes can be carried out. If you are concerned about a Will and wish to dispute whether it is a valid Will, on approach is to investigate whether it has been properly witnessed by taking statements from the witnesses named in the disputed Will.

If you think a Will which is being used to distribute someone’s estate is invalid, contact Phil Youdan  at philip.youdan@cripps.co.uk or on 01732 224 013 to discuss the options available to you.

 


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