Succession Disputes Involving Landed Estates
The English law of succession is of particular importance to the owners of independent historic houses and landed estates. Whether these houses or landed estates have been held in the same families for many generations or in the care of new families, the current custodians will be particularly concerned to ensure that the land continues to be maintained and managed responsibly by the next generation after they are gone. If such concerns are not handled carefully, they have the potential to give rise to significant family conflict, particularly if family tradition and the needs of the estate do not meet the needs or expectations of individual family members.
Many landed estates are held in a trust or similar structure, in which case there will be trustees in place who can oversee an orderly transition from one generation to the next. Trust structures can pose potentially contentious issues of their own: you can read more about Trust Disputes Involving Landed Estates here.
Landowners who have acquired their estate outright must decide for themselves what succession arrangements to put in place. It is a fundamental principle of the laws of England and Wales that individuals have the freedom to leave their property and other assets however and to whomever they wish. This is in contrast to some European countries where forced heirship rules apply for the benefit of specific members of the deceased’s family. However, testamentary freedom is not an unfettered right and there are numerous claims that can be pursued challenging the succession of the deceased’s estate, by a variety of potential claimants, if certain rules and principles are not adhered to. This article addresses some of the most common claims that can be made in these circumstances.
Claims by Disappointed Beneficiaries
There are a variety of claims that can be pursued by those dissatisfied by with terms of a will (or, where applicable, the distribution of the deceased’s assets under the intestacy rules) or those who believe they have acquired an interest in an asset during the deceased’s lifetime. Some of the most common claims of this nature are addressed below.
Claims under the Inheritance (Provision for Family and Dependants) Act 1975 (‘the 1975 Act’)
There is a specified class of claimants under the 1975 Act who are entitled to make a claim seeking to alter the distribution of a deceased’s estate, if they can show it fails to make reasonable financial provision for them. This includes a spouse/civil partner, a child (minor or adult), an ex-spouse/civil partner who has not remarried or someone treated a child of the deceased. Such claims under the 1975 Act must be brought within 6 months of the date of the grant of representation in relation to the deceased’s estate (or later, with the permission of the court). If the claim is successful, the Court has the power to vary the distribution of the deceased’s estate for the benefit of the claimant, representing a significant exception to the principle of testamentary freedom in England and Wales.
For all claimants other than spouses and civil partners, reasonable financial provision amounts to what is required for their maintenance, comprising their housing needs and day to day living expenses. There is a higher standard for spouses and civil partners, who are entitled to make a claim for such provision that would be reasonable in all the circumstances, whether or not that provision is required for their maintenance.
In assessing whether a will fails to make reasonable financial provision, the court takes into account a variety of factors including the financial resources and financial needs of the claimant now and those likely in the foreseeable future, any obligations or responsibilities the deceased had towards the claimant or any beneficiary of the estate and the size and nature of the net estate (amongst other factors). Additional factors apply to a claim by a spouse or civil partner, including the level of provision they might have expected to receive, had the marriage or civil partnership been terminated by divorce. These factors can have significant implications for a landowner wishing to leave his estate to one or more of his children rather than his spouse, particularly in the case of a long marriage.
Landowners also need to be aware of the law of proprietary estoppel and the circumstances in which a claim on these grounds might arise. A proprietary estoppel claim may be successful if a claimant can prove that the deceased made a promise, assurance or other encouragement that they would receive a proprietary interest in land or other property on his death and that they relied on that promise, to their detriment.
The representation or promise does not need to be clear and unequivocal and depends heavily on context. It can be made by implication or inferred from indirect statements and conduct. However, a hope of acquiring a right is insufficient and the promise must be reasonably understood as being seriously intended to be capable of being relied upon. The detrimental reliance of the third party needs to be substantial but does not have to consist of financial expenditure or another quantifiable detriment.
Such claims often arise in relation to landed estates, particularly those that hold agricultural land, where a child has lived and/or worked on the farm (sometimes for little or no wages or other benefits) on the promise made that “one day it will all be yours”. If the parent then seeks to sell the farm or leave it to someone else, the child would potentially have the right to make a proprietary estoppel claim.
Will Disputes – Validity Claims
There are specific legal requirements that must be met for a will or other testamentary document to be valid and effective, which are prescribed by legislation and in common law. A failure to comply with these requirements will leave the deceased testamentary wishes open to challenge. Such requirements can be complex, depending on the circumstances. As a consequence, legal actions challenging the validity of a will are more commonplace than one would perhaps expect, even where the Will has been prepared by a solicitor. If a challenge is successful, it can lead to assets passing to unintended beneficiaries, who either benefit under a previous will or under the intestacy rules (which provide a statutory order of those that inherit where there is no valid will in place). This can have devastating consequences for a landed estate, which could result in the unexpected sale or division of parts of the estate and other assets, irrespective of the deceased’s wishes. Some of the most common challenges to the validity of a will are set out below.
A will must be duly executed in accordance with the formalities of section 9 of the Wills Act 1897, which sets out the procedure as to how the will should be signed and witnessed for it to be valid. Strict adherence to the formalities is required and any deviation can render the will invalid and unenforceable.
Want of Knowledge and Approval
One such requirement is that the testator knew and approved the contents of the will when it was executed. Knowledge and Approval is presumed in most circumstances, but not all. For example, where a testator is deaf or blind the court would expect positive evidence that they knew of and approved the content of the will before it was executed (such as evidence that it was read to them or positive evidence they had read the document they executed in full themselves). Similarly, if there is extraneous evidence that suggests the will is inconsistent with the testator’s wishes, the presumption may not apply.
An individual must also have the requisite mental capacity to make a will. The test for testamentary capacity was first set out in the case of Banks v Goodfellow over 150 years ago and consists of four different limbs, all of which must be satisfied:
- The testator must understand the nature of the act of making a will in general and its effect.
- The testator must understand the extent of the property to be disposed of. This does not require a detailed understanding of the precise value of their estate and all of its components, just its approximate value and the assets’ relative worth.
- The testator must understand the claims of those who might be beneficiaries, being able to appreciate who might have a claim and decide fairly between them.
- No disorder of the mind or insane delusion should poison the testator’s affections, pervert their sense of right or prevent the exercise of their natural faculties as to bring about a disposition which would not otherwise have been made. There must be a causal connection between any disorder or delusion and the decisions made as to distribution of assets.
The focus of the test is on the ability to make decisions generally rather than to understand a particular choice being made in the will. The emphasis is on whether the testator is able to consider all the relevant matters to make a decision.
If any of the requirements set out above are not present, the testator will not have the requisite testamentary capacity and any will that they make could be set aside, if a challenge is pursued. If there is any room for doubt at the time the will is being prepared, appropriate steps should be taken to ensure that the testator has the requisite capacity before it is executed, including obtaining a specialist medical opinion where appropriate.
A will or other testamentary document will be invalid if it was procured by undue influence. Typically, this can arise where the testator has been put under significant pressure to leave some or all of his wealth in a certain way.
Undue influence has been defined as “pressure of whatever character … if so exercised as to overpower the volition without convincing the judgment”.  Persuasion whether or not it has been exerted unduly or unreasonably, will not amount to undue influence if the testator remained able to reject or accept proposals made to him and was in fact convinced of their merits. For undue influence to exist, the third party must have coerced the testator into making a will, which they did not wish to make but felt they had no other option but to do so.
The burden of proving undue influence is on the person seeking to argue it, which can be difficult to achieve successfully, given that the principal witnesses in the case will invariably be the deceased and the accused and there is unlikely to be much by way of documentary evidence supporting the case. However, undue influence can be inferred from circumstantial evidence and the physical and mental strength of the testator will be taken into account.
Primarily this concerns forged signatures, false witnesses, alterations to gifts (amounts and names) and dates. This area of challenge also includes fraudulent calumny, where false representations about a potential beneficiary are made to the testator to encourage them to exclude that potential beneficiary from their will or change what they are to receive.
Disputes Between Personal Representatives and Beneficiaries
Even in circumstances where the validity and effect of the deceased’s testamentary wishes is not in question, disputes may nevertheless arise in relation to precisely how deceased’s assets should be administered. This is particularly the case, where the deceased’s assets and/or the terms of his will are complex. The duties owed by the deceased’s personal representatives are similar to those owed by trustees in the administration of trusts and the types of court proceedings that can arise between beneficiaries and their trustees/personal representatives follow largely the same principles. You can read more about such proceedings in relation to Trust Disputes Involving Landed Estates here.
Effective Succession Planning
There will sadly always be certain families for whom it proves impossible to avoid a dispute following the death of a family member. But in many cases, such disputes can be successfully avoided through careful succession planning, including taking into account the different types of claim that could arise and taking steps to minimise their impact. Putting in place a valid will that leaves little or no room for challenge is an important first step, although it should be borne in mind that nothing can prevent an unmeritorious claim being made. Testators can make witness statements to explain the content of their will, to be seen after their death or can leave a letter of wishes to guide their executors with any decisions they are required to make, with a view to minimising areas of potential dispute. It can also be helpful for landowners to discuss their succession plans with their family at the time they are being drawn up (where circumstances permit) to avoid unwelcome surprises arising and to allow for any issues to be resolved before it becomes too late. You can read more about Succession Planning for Landed Estates here.