John Melville-Smith, partner at London law firm Seddons, explains using a case study.
The latest inheritance dispute to make the press is that of the second world war veteran and former Savoy waiter, and his cleaner. Mrs Da Costa was the main beneficiary of Mr Tickner’s 2014 will. However, the following year, in a nursing home days before his death from cancer at the age of 91, he transferred his house to his nephew, Mr Germain and executed a new will, instead leaving his estate to his estranged daughter. The combined effect of the documents therefore was to remove the house from the estate – since it passed not by will but as a gift made before death – and to leave by will only the remaining assets, of which Mrs Da Costa received nothing, rather than the estimated £400,000 she was to receive under the 2014 will.
Mrs Da Costa challenged the will, claiming that Mr Tickner lacked the requisite testamentary capacity by reason of his cancer at the relevant time to make a valid will. Based on the expert evidence, Mr Justice Henderson agreed and set the 2015 will aside. The result is that the previous will is resurrected, but the house transfer remains good – for now – and the house therefore in the ownership of Mr Germain. Mrs Da Costa may now have to bring a claim to restore it to the estate.
Why are separate proceedings necessary? Principally, because Mrs Da Costa had no status to challenge the house transfer under the 2015 will, which left her nothing whether it was in the estate or not. Moreover, there are two distinct legal ‘capacity’ tests to consider here: that relating to lifetime gifts and that relating to the making of a will.
The first is set out in the leading case of Re Beaney, in which a mother, with advanced dementia, gifted her house, her only asset of value, to one of her three children. The gift was held to be void because neither the claims of the siblings nor the extent of the property being disposed of had been explained to the mother.
The judge said: “The degree or extent of understanding required in respect of any instrument is relative to the particular transaction which it is to effect. In the case of a gift the degree required varies with the circumstances of the transaction. Thus, at one extreme, if the subject matter and value of a gift are trivial in relation to the donor’s other assets a low degree of understanding will suffice. But, at the other extreme, if its effect is to dispose of the donor’s only asset of value and thus, for practical purposes, to pre-empt the devolution of his estate under his will or on his intestacy, then the degree of understanding required is as high as that required for a will, and the donor must understand the claims of all of the potential donees and the extent of the property to be disposed of.”
If therefore the mother had gifted the one child something that was relatively small in terms of her whole estate, the gift would probably have been valid. So it is in the case of Mr Tickner, whose gift of the house to Mr Germain in his last few days of life, at a time when Mr Justice Henderson has decided he lacked the necessary capacity to make a new will, is very likely to be set aside on the same basis as the gift in Re Beaney. Mr Germain will have been advised that he faces defeat, and will presumably throw in the towel. It is unlikely therefore that much more will be heard of this case.
Returning to the will itself, the starting point for the court is always testamentary freedom: Mr Tickner had the right to leave his estate as he wished. There are limited grounds to challenge his expressed wishes and subjective unfairness is not among them. Mrs Da Costa’s case was that Mr Tickner lacked the necessary testamentary capacity to make his last will, which is such a ground.
To make a valid will, a person must understand the nature of making a will and its effects, be aware of the extent of their property, though not necessarily of its value, be able to appreciate the moral claims to which they ought to give effect, even if they choose not to do so, and have no disorder of the mind that perverts their sense of right or judgment.
The level of understanding required by the test varies according to, among other things, the complexity of the will itself. A person with early Alzheimer’s Disease is probably able to make a simple will, whereas one who can no longer remember what they own and needs to be reminded who their spouse and children are on a daily basis, will certainly lack the necessary capacity.
It is clear that Mr Justice Henderson decided the case substantially on expert evidence, probably that of an old age psychiatrist who would have produced a retrospective capacity report based upon the medical records, but he would also have heard the evidence of any solicitor or will draftsman who took instructions from and drafted Mr Tinkner’s 2015 will.
The overall outcome will be that Mrs Da Costa will inherit under the terms of the 2014 will as if none of this had happened, subject to probably not recovering all her legal costs. Mr Germain will probably end up paying a large proportion of those costs, a sum well into six figures, as well as his own. That is the lesson of disputed will claims: they are fact heavy, require expert evidence and are expensive to pursue or defend. They should be settled at an early stage through mediation if at all possible.
John Melville-Smith is a partner at London law firm Seddons.