Analysis of Law of Succession Cases - Case Study Example

In The E s of Nicky And Lydia Gray It appears that Nicky Gray and Lydia Gray were not married and had no children. The Will left by them is subject to the provisions of Wills Act 1837, Administration of Estates Act 1925, and Inheritance (provisions for Family and Dependants) Act 1975. As per s.32 (1) of the Administration of Estates Act 1925, funeral expenses, debts and liabilities of the deceased are a first charge on their estate. Accordingly, joint funeral expenses, expenses for reception incurred by John Gray and proportionate cost of the mausoleum for 2 bodies contracted for by their cousin Maud should be equally shared by recovering from the estates of Nicky Gray and Lydia Gray before other debts if any are paid. However a practitioner must advise the executors to publish an advertisement in the London Gazette and in the news paper having circulation in the district where the respective assets of the deceased are situate, for any liabilities owed by them. This is a requirement under section 27(1) of the Trustee Act 1925. As per what is known as Benjamin order 1, if it is not practicable to advertise, court should be approached for an order to distribute the estate assuming that all debts have been ascertained.2 As per s 34 and schedule 1 of Administration of Estates Act, it should be ensured that all debts are paid with due diligence, formal discharge or receipts for payments should be obtained and obtain a clearance certificate for tax liability on the estate of the deceased from the Capital Taxes office, and ensure that Department of Social Services does not have any claim on the estate,3 In addition any mortgage debt should be paid after payment of funeral expenses.4 Since it has been mentioned that the Greenfield 'was left in trust for life ', it should be examined whether exemption from inheritance tax can be claimed under Trustees Act. The gift of violin to Beatrice will be exempted from Inheritance Tax if value is below 3,000, even though the deceased Nicky Gray had not survived for 7 years from the date of gift for availing exemption from the said tax. As the value of the Nicky Gray's property is said to be 500,000 as per the offer the executors in trust have received which is in excess of the 300,000, it is subject to Inheritance tax. The value of other assets also must be added to this value to compute inheritance tax which at present is 40% of the nil rate band of 300,000 for the year 2007-2008 and 350,000 thereafter upto April 2010. The executors may liable to pay the inheritance tax within six months of the testator's death and then only apply for Probate with evidence of having paid some or all of the tax due. The executors also should apply for probate in the probate court either in Principal Registry in London or in an applicable district probate court as the case may be and obtain a probate order from the court. This is an authority conferred by the court on the executors to deal with the estate of the deceased in accordance with their Will. This will also help get access to Lydia Gray's bank account on being produced at the identified bank. Nicky Gray's Will Nicky's Green filed house is to be held in trust by Howard and Elaine Gray for life and then what ever is the remainder of the house will go to Alan Gray. Since Alan Gray is also one of the executors, he took the probate but is not taking any action. As Howard Gray and Elaine Gray who are ninety years old, they better appoint Administrators on their behalf to carry out the Will's administration. Subject to clarification regarding exemption from inheritance tax, it is only after the payment of inheritance tax, the court will issue grant with which the executors can deal with the property. The executors in order to pay the inheritance tax have to borrow money or meet from their own funds initially. They have to maintain an account for every beneficiary to see. They can distribute the balance amount of the estate after deducting the tax so paid and other expenses incurred and other liabilities paid if any. Under section 25 of the Trustee Act 1925, Howard and Elaine Gray may give power of attorney to a solicitor delegating their powers to him for a period not exceeding 12 months to exercise necessary powers for applying to probate court and if necessary to dispose of the property subject to payment of debts if any after meeting expenses for funeral and other funeral related expenses such as reception and mausoleum. Due to the reckless act of Alan Gray, the gift of violin intended for Beatrice has been lost and therefore, she should be compensated for it from the remainder portion meant for Alan Gray or from the Bank account of Nicky Gary as the case may be. The sovereigns left for their cousin Sister Pam will not attract inheritance tax if value is less than 3,000 and also if the executors had survived Sister Pam for more than seven years in case of the value exceeding the limit. The China Dolls taken away by their employee Mrs Llewellyn on the ground that she was not paid wages for several months must be restored by her and she must instead claim her back wages from the personal representatives. For any further claim that she was not remembered in the will as had been promised, she is free to approach court and make out a case for her inclusion for an appropriate value of amount to be paid to her. There is provision in the Wills Act that if any person feeling left out in the Will and denied of rightful share in the testator's property, he/she may approach the Probate court for necessary remedy. As regards the rent-free tenancy of Jackman presumably in the premises of Greenfield belonging to Nicky Gray, his lodger is liable to the estate of Nicky Gray for the damage done wiring on the first floor due to his illegal act of growing cannabis under intense light. Since the Greenfield estate is to be disposed off by the trustees, Jackman is no longer entitled to continue his stay. This is by virtue of the principle that landlord-tenant principle shall prevail over the tenancy right under any other privilege. Even other wise for the illegal act, he is not entitled to stay any longer, though Jackman can in case the house is not disposed of. Due to the professional negligence of their solicitors, gardener Pearce has been deprived of benefit of the legacy of 2,000 from each will. The trustees should prove before the probate court that but for the solicitors' omission, Pearce would have been entitled to the legacy of 4,000 as evidenced by the letters of the testators instructing solicitors to make codicils providing for the said legacy. If however court does not approve of it, then the solicitors must be proceeded against by the Gardener Pearce for necessary compensation impleading the trustees for necesssray evidence. Since by moving the probe court through their power of attorney holders, they can access the bank accounts of the Nicky and Lydia, it may not be difficult for the trustees for life to meet the expenses arising out of repairs to roof skylight besides the commitments mentioned above arising as a charge on the estate of Nicky Gray. In the event of the funds in the bank accounts being found sufficient, there will be no need to sell the Greenfield property and it can devolve on Allan Gray as a remainder. Inheritance tax also is not payable as life trustees and hence bank funds must be adequate to meet the other small claims mentioned above. Lydia Gray's Will Nicky Gray had no house but only the furniture store which she has bequeathed to John Gray and its residue to Alan. It is not known what is the short fall in her bank account to meet her debts in full. Besides, her estate is due for half of the funeral and related expenses above. Hence Howard and Elaine Gray's solicitors holding power of attorney, must within the prescribed time, move the probate court for taking over the furniture store and administer it John who entrusted the store to Beatrice entrusted the furniture store with, has no other choice but to bear the loss besides selling the store to meet the shortfall to meet Lydia Grays's debts. He has already spent for her funeral and reception 3,500 as her share which he need not claim back due to bankruptcy situation of Lydia's estate. But since these expenses have the first charge, he can make use of it and claim from the bank account of Lydia and also pay Maud for the Lydia share of Mausoleum cost. Since capacity of it is six bodies, whether cost of the remaining space for four bodies can fall on the estates of Nicky and Lydia is to be examined. Since it can not be given to public but can be used for future use of the family members of the deceased, the entire cost the Mausoleum should be borne by their estates. Since this also will have first charge, it is only after satisfying these debts with the bank balance, the other undisclosed assets should be paid proportionately including the legacy of 2,000 due to Pearce in case of short fall. For the purpose, the John Gray must make an advertisement to ascertain the actual debts from the potential creditors. Beatrice can not be held responsible for the loss but only John Gray himself because of whom Alan entitled for residue also would stand to lose. Before implementing the above, it should be ensured whether the Wills have been made in accordance with the relevant Act and Rules. A brief look at them will therefore be necessary for successful administration. It must be ensured that the testators had the mental competence to make the said Wills. As per the decision in Banks v Goodfellow 5, mental competence means whether they had a sound and disposing mind and memory at the time the Wills were made. The testator must have been aware of not only his property details but also the persons who were likely to make a moral claim on their properly even if they have omitted them in their Wills as held in Harwood v Baker.6. This is because he can state reasons for omitting them in order to avoid future claims after death. Mental incompetence does not however mean that the testator need not have capricious, frivolous and bad motives in making a Will.7 In Banks v Goodfellow, it was claimed that the testator had been under delusion of being dictated by evil spirits. Yet it was held not incapacity. At the same time in Dew v Clark 8 , the testator had believed that his daughter was Satan's special property and hence gave a small gift out of a large estate. Held that the Will was invalid. Similarly, the testator excluded his nephews in his will as he had been under the delusion that they were not alive. Held that the Will was invalid.9 Further it is enough, if the testator was mentally competent when the Will was actually made. If he was not competent before or after the Will's making, it is still valid as held in Ewing v Bennett10. There is an exception to this rule in that if a testator was competent when he gave instructions to the solicitor but not when the Will was actually made, it will be still valid since instructions had been given to a solicitor and he made it as per the instructions of the testator. This was held in Parker v Felgate11. In the instant case, the testator have died in car accident and it should be ruled out that it was a planned murder in order to grab their estate by those around them Burden of proof is on the propounder of the Will before the court to show that testator was competent mentally. If on the face of the Will, it appears irrational and hence vitiated by incompetence, the presumption is rebuttable as held in Symes v Green. 12 When the testator makes the Will, he should have actually had the intention to make the Will, i.e 'animus testandi'. Hence capacity along with animus testandi must be present at the time of making the Will as held in d'Eye v Avery. 13 . In order to establish 'animus testandi', it must be demonstrated what should happen to his property after his death. As the executors in the instant case must have been too close to the testators, it must be proved that there were no undue influence and fraud in making of the Will. A leading case in this connection is Parfit v Lawless.14 It was held that there could be no presumption of undue influence merely because of close relationship between the testator and the beneficiary. It must be shown that testator was coerced. The burden of proof is on the party claiming undue influence. Hence unless strong evidence of undue influence is shown, court will penalise the person alleging undue influence as held in Re Cutcliffe's Estate [1959] and re Good [2002]15, 16. Apart from undue influence, fraud is intentionally misleading the testator. Since fraud is also a serious allegation like undue influence, convincing evidence must be adduced. Besides the above, it should be verified that Will was signed by the testator or by some other person in the testator's presence and through his guidance or direction as per section 9 (a) of the Wills Act. There need not full signature but enough to show it was signed. Thus a thumb print 17and half name in signature 18were held to be sufficient. The signature could not be completed in full name since in the relevant case, the testatrix had written half her name before becoming unconscious. Even the testator need not sign if some other person signs but in the testator's presence is insisted because it would prove that testator was mentally and physically present. Another requirement is that a witness to the Will can not be a beneficiary under it. If he is made a beneficiary, he will lose all benefits under the deed. But he will still be competent witness. Hence in the instant case, it should be verified who have signed as witnesses and whether they have been conferred any benefits under the Wills discussed. It should be borne in mind that any such beneficiaries should not fall as innocent victims as witnessed to the deed of the Will. Further the Solicitor making the Will is given benefit under the Will, should do so in the presence of another solicitor. Thus the Wills discussed above do not necessitate disposal of the Greenfield property to discharge the debts since by probate order, the executors can gain access to bank accounts for discharging the debts. If the intention had been otherwise, Nicky Gray would not have made them trustees for life. As they are holding in trust for life, inheritance tax also will not be attracted. Read More