Perhaps because of the economic climate, we have recently seen an increasing number of people arguing about wills. Generally people think that the terms of a will are final, but it is not as simple as that. If a disgruntled former spouse, child or even lover of the deceased feels that they were unfairly cut out of a will, they are increasingly turning to the courts to remedy the situation. In fact, just about anyone who was being maintained by the deceased at the time of death can make a claim. Fortunately, the vast majority of cases can be settled with a bit of common sense on all sides, but there are, of course, situations where, for all sorts of reasons, that doesn’t happen.
These difficulties can be avoided by taking proper advice when drawing up a will. If a farm-owner wants to ensure that his farm is passed on in accordance with his wishes, he or she should take great care to ensure that this is done properly and planned in advance. For example, a farm-owner may have a spouse and three children, but only one son who shows an aptitude and desire to carry on with the farm. He decides to give the whole of the farm to this son. What then does his wife do if she has not been provided for? She and the other children can bring a claim.
One feature of Inheritance Act claims is that, usually, the costs of all of the parties will be paid out of the estate. This means that, unlike in most litigation where the loser pays the costs of the winner, the money usually comes out of the estate ‘pot’ resulting in there being less to share out, so all parties lose out if the claim is not settled reasonably and swiftly, though their lawyers do not.
Imagine then if a claimant has a ‘no win, no fee’ arrangement with their lawyer. This sounds very fair and reasonable to the client, but is it in the interests of justice in Inheritance Act claims? The lawyer agrees, say, a 50% uplift on their fees if they win, but they know full well that they are very likely to get their costs out of the estate so they have little to lose, and much to gain. If a claimant believes that their costs are going to come out of the estate ‘pot’ then there is little deterrent to pursuing their claim to the bitter end.
In a recent case, an actress brought a claim against the estate of her mother’s partner, whose estate included a manor house, farming land and other assets, with a net value of over £1,000,000. The deceased had given the claimant many gifts, including loans of approximately £170,000 and she claimed that she was being maintained by these. Her claim was for £875,000, almost the whole of the estate and her ‘no win, no fee’ costs were estimated to be a further staggering £267,000. If successful, her claim and her costs would have just about wiped out the estate, and the intended beneficiaries would have received nothing. However, in that case, the judge decided that the loans were not enough to prove she was being maintained, and she and her lawyers were substantially out of pocket. It could, however, easily have been otherwise.
The best advice we can give you is that prevention is better than cure.