STATUTORY WILLS - A CASE STUDY - Elderly Client Adviser

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posted 1 Jul 1999 in Volume 4 Issue 5

STATUTORY WILLS - A CASE STUDY

Mrs Jones, as part of her retirement planning, granted an enduring power of attorney to her nephew, Roger. Unfortunately, her mental faculties subsequently deteriorated and Roger, in complying with his legal duty, registered the enduring power with the Court of Protection. As time went on, Mrs Jones found it hard to manage living on her own and so moved into "The Elms" residential home.

Mrs Jones owns her home, "Whiteacre", which is worth in the region of £160,000. The house is now being sold. Apart from her home, Mrs Jones has £25,000 in her building society account and £1,000 in her bank account for the receipt of her pensions and payment of outgoings on the house. Apart from the interest on the savings account, Mrs Jones's sources of income are her state pension, attendance allowance and a small pension from her late husband's former employer.

Five years previously, Mrs Jones had made a will. She had appointed Roger her sole executor and given to him as a specific gift, Whiteacre. The residue, after payment of all liabilities, was divided equally between her two sisters, Agnes and Grace aged 88 and 90 respectively.

Roger is concerned that if Mrs Jones were to die, the proceeds of sale of "Whiteacre" would form part of the residue of her estate and pass to his two aunts.

A case for a statutory will?

When Mrs Jones made her will, her intention was clearly that her most valuable asset, her home, would be given to Roger. The balance, which would have been considerably less, would pass to her two sisters. If no action is taken and Mrs Jones dies, Agnes and Grace will each inherit approximately £93,000. Mrs Jones' intention was that they should each receive in the region of £13,000. Roger is quite right to be concerned.

The Court of Protection has the power to make an order for the execution of a will or codicil, making any provision which could be made by a will executed by a patient under their jurisdiction, as if he or she were not mentally disordered(i). The will will be effective as if it had been signed by the patient in his or her own hand for the purposes of the Wills Act 1837. However, the provision as to the signing and attestation of wills does not apply (ii).

An application for a statutory will needs to be made on behalf of Mrs Jones for the following reasons: -

[a] The legacy will not be saved by section 101 of the Mental Health Act 1983 (the 1983 Act), which protects testamentory gifts where property has been sold in the course of a receivership.

Had Mrs Jones not made an enduring power of attorney and had it been necessary for a receiver to be appointed in respect of her property and affairs, the Court would probably have made an order under the 1983 Act authorising the sale of her home(iii). Under Section 101(1), Roger's interest in Mrs Jones' property would have been preserved, to the extent of any property representing the proceeds of sale. So long as this remained part of Mrs Jones's estate, it would have been treated as real property.

The Master could have given such directions as appeared to him necessary or expedient for the purpose of facilitating the operation of sub-section (1).

He could, for instance, have directed the transfer of the money to a separate account, nominating it as "the proceeds of "Whiteacre".

It is ironic that those individuals who plan ahead and wisely make an enduring power of attorney are not afforded the benefit of Section 101 in the same manner as those people who do not plan ahead and necessitate an appointment of a receiver.

[b] Roger, as a nephew, has no locus standi to bring a claim against Mrs Jones's estate under the Inheritance (Provision for Family and Dependants) Act 1975, unless he was being maintained by his aunt immediately before her death. In the circumstances, this is extremely remote.

[c] Although it may be possible for Agnes and Grace to enter into a deed of variation of the will after Mrs Jones' death, this pre-supposes that :-

(i) Agnes and Grace consent to a variation;

(ii) Agnes and Grace will be well enough, both mentally and physically, to agree to the variation;

(iii) they survive to inherit under the will; and

(iv) there will be no legislative changes to the current inheritance and capital gains tax advantages of post death deeds of variation (iv).

Should Roger be informed of the contents of the will?

In a case where an application has been made to the Court of Protection for a receiver to be appointed, a copy of any will (and codicil) would be lodged with the Court. This enables the Court to ensure that so far as possible, in administering the property of the patient, they do not alter the character or interfere with the rights of succession. The Court does in making specific directions as to the disposal of a patients' property, take into account the interests of those who may benefit under an existing will. However, regard will also be given to the current fiscal system, the demands and needs for investment and the patients' financial requirements.

An attorney, by contrast, would have to make his or her own enquiries as to the contents of any will to ensure that his or her management of the donor's property does not conflict with its provisions.

Solicitors are under a duty to keep their clients affairs confidential(v). However, in the circumstances, it is necessary for Roger to have sight of the will in his capacity as attorney to be able to manage Mrs Jones's finances properly. Unless there is evidence that Mrs Jones did not want the will disclosed, the writer would suggest that the solicitor could not be criticised for providing this information, particularly if the enduring power was general and without any restrictions.

The basic procedure

1. Establish jurisdiction

Whenever a solicitor has to make an application for a statutory will for an elderly person, it must be good practice to treat it as urgent. Provided the Court has evidence of their jurisdiction to act in the matter, the application can be dealt with relatively swiftly.(vi)

The Court needs confirmation that the patient is suffering from a mental disorder, as defined by the1983 Act, and is incapable by reason of that mental disorder of managing and administering his or her own property and affairs. Jurisdiction can be established in Mrs Jones's case by her general medical practitioner completing the standard Court of Protection medical certificate and filing it with the court. (vii)

2. Establish testamentary capacity

The Court of Protection does not have the power to stop a patient from making a will and it does not necessarily follow that because a person is under the Court of Protection's jurisdiction, they do not have testamentary capacity. For this reason, the Court will also require a medical certificate confirming that Mrs Jones does not have testamentary capacity. The Court will require that this evidence is recent and if not available or if no other evidence can be obtained, the Court may seek a report from one of the Lord Chancellor's medical visitors.

3. Who can make the application?(viii)

Rule 17 of the Court of Protection Rules 1984 sets out who can make the application and

(i) most usually it would be the receiver, whether appointed or in the process of applying; or

(ii) any person who, under a known will or codicil, or under an intestacy, may become entitled to any property of the patient or any interest in it; or

(iii) any person, for whom the patient might be expected to provide, if he or she were not mentally disordered; or

(iv) Indeed, the Court may authorise any person to make the application. Roger can therefore make the application as he fulfils the requirements of (ii) above.

4. The supporting evidence

An affidavit or affirmation should support the application. A lot of the information that would ordinarily be provided within a receivership application and contained in the Certificate of Family and Property(ix) is relevant information to be included within the affidavit. In particular it should include the following information: -

(a) A family tree showing the relationship between Mrs Jones and other members of her family, giving their names and dates of birth;

(b) Current valuations and details of Mrs Jones's assets;

(c) Information about Mrs Jones's present and presumptive needs and the general circumstances surrounding the application;
(d) A statement as to Mrs Jones's current general health and her expected state of health;

(e) Details of where Mrs Jones is living and whether there is any likelihood of change to this, which would include the financial liability of such change;

(f) Full particulars of the resources of any proposed beneficiary, such as Roger, Agnes and Grace with details of the changes if the application succeeds;

(g) An explanation of the incidence of capital and income tax liabilities as a result of the proposals (if any);

(h) Details of Mrs Jones's domicile and whether any immovable property will be affected; and

(i) A copy of Mrs Jones's current will.

5. Consent of the Executors

The Court will also require confirmation from the proposed executors, in this case Roger, to consent to act in that capacity.

6. The draft Will

The application should be accompanied by a draft of the proposed statutory will, in duplicate, in case of any amendment.

7. Who is given notice of the hearing?

The Court has a wide discretion as to who to notify of the hearing. Much will depend on the urgency, however in general, any person whose interest may be materially and adversely affected by the proposals, such as Agnes and Grace, should be notified. As Roger is personally interested in the application it is possible that the Court will direct that Mrs Jones be represented by the Official Solicitor(x).

8. The hearing

It is usual for the matter to be heard before the Master in chambers but he can refer any matter to the Judge(xi).

9. Execution of the Will

In the event that the Court of Protection authorised the execution of a will or codicil, the document must be expressed to be signed by the patient acting by the person authorised by the Court, and must be: -

(a) signed by the authorised person with the name of the patient, and with his own name, in the presence of two or more witnesses present at the same time, and

(b) attested and subscribed by those witnesses in the presence of the authorised person, and

(c) sealed with the official seal of the Court of Protection. (xii)

The will has to be executed and attested in accordance with (a) and (b) above prior to it being sealed by the Court. The authorised person signing on the patient's behalf is not precluded from benefiting under the Section of the Wills Act 1837, which prevents witnesses from benefiting. (xiii)

In the recent case of Re Hughes deceased(xiv), the Court held the 1983 Act did not expressly require the will to be sealed in the lifetime of the patient. In that case, the statutory will was approved by the Court of Protection and was signed by the receiver as the official person, and returned to the Court of Protection for sealing.

Unfortunately, it was then returned, as the will had not been certified by the solicitor as being in accordance with the settled and approved draft. On the day the will was returned to the Court of Protection, and prior to sealing, the patient died. It was held that the jurisdiction of the Court did not end with death, because the purpose of sealing by the Court was evidential.

As solicitors have what appears to be an increasing duty of care to potential beneficiaries under a will, it is important that when taking instructions for both wills and enduring powers of attorney that consideration is given to the effect of the disposition of the assets in the will if the individual were required to self fund long term care.

It is arguable that in the event of Mrs Jones's death occurring before the order authorising the execution of a statutory will, Roger could bring an action of negligence against the solicitors who prepared the will and enduring power of attorney for failing to advise and take into account the possibility of the present situation occurring when drafting the documents.

© Caroline Bielanska, June 1999