Insight

Legacy loop: summer edition 2021

Published: 29th June 2021
Area: For the individual

Welcome to the summer edition of our Legacy Loop coverage

Clitheroe v Bond (2021) EWHC 1102 (Ch)

This recent decision is significant in reiterating that the correct test when determining mental capacity to make a will is still that set out in Banks v Goodfellow (1870) and not the Mental Capacity Act 2005.  

The 19th century case of Banks v Goodfellow provides the well-established common law test for determining mental capacity to make a will and is almost always referred to by legal advisors in cases where a lack of capacity is asserted.

Background to the case

In summary, the Banks v Goodfellow test sets out that a testator must:

  • Understand the nature of making a will and its effects.
  • Understand the extent of the property of which they are disposing.
  • Be able to comprehend and appreciate the claims to which they ought to give effect.
  • Have no disorder of the mind that perverts their sense of right or prevents the exercise of their natural faculties in disposing of their property by will.

The level of understanding required varies with the complexity of the will itself, the assets and any claims on the testator.

In the case of Clitheroe v Bond however, the court had the opportunity to re-consider arguments that the Mental Capacity Act 2005 should replace the Banks v Goodfellow test for determining capacity, as well as examining the current test for delusions (limb 4 of the Banks v Goodfellow test).

The case concerned a dispute between a brother and sister over the validity of two wills made by their late mother. The court was asked to decide whether the mother died intestate (effectively without a will) – meaning daughter, Susan Bond, and son, John Clitheroe, would receive an equal share of the £400,000 estate – or whether her wills were valid, meaning almost all of the residuary estate would go to the son.

In the original trial, it was held that both wills were invalid due to the mother not having sufficient mental capacity to make the wills. It was found that, at the times the wills were made, their mother was suffering with complex grief reaction, 'insane delusions' and persisting depression following the death of her eldest child from cancer.

What was the outcome?

However on appeal, it was argued that the judge had applied the test in Banks v Goodfellow incorrectly when determining the mother’s capacity. It was concluded that the correct test for determining capacity continues to be the Banks v Goodfellow test. It was also concluded that to establish delusional thoughts, the relevant false belief must be “irrational and fixed in nature”. The parties have been given a further three months to reconsider their positions in light of these decisions.

This case has provided contentious probate lawyers with welcome clarity on the ongoing effectiveness and use of the Banks v Goodfellow test.

A full copy of the judgment can be found here.

Miles & Shearer v Shearer (2021) EWHC 1000 (Ch)

A recent unsuccessful claim brought by two adult children under the Inheritance (Provision for Family and Dependants) Act 1975
Background to the case

This recent high-profile claim was brought by two adult daughters (Juliet and Lauretta) of a deceased father’s estate. Neither the daughters nor their children benefitted under their father’s will and Juliet and Lauretta therefore brought a claim under the Inheritance (Provision for Family and Dependants) Act 1975 for financial provision from the estate. The claim was defended by the deceased’s second wife, Pamela, who was the principal beneficiary of the estate.

What was the outcome?

The court dismissed the claim. It was held that the pair were able to meet their maintenance needs from other resources and their father had no obligation or responsibility towards them. They had also been well provided for during the parent's lifetime and the court therefore made no award for further provision from the estate.

What does this mean for charities?

Adult child claims are generally considered difficult to succeed in, particularly where the individuals bring the claim are financially stable. This case provides a further reminder the court is unlikely to make an award to an adult child in those circumstances, even where the estate is of considerable value. If charity beneficiaries are faced with a claim brought against the estate by an adult child claimant, it is important to seek legal advice early to establish the true merits of that claim and the strength of the position to take in defending the claim.

A full copy of the judgment can be found here.

Rittson-Thomas v Oxfordshire County Council, 2019 EWCA Civ 200

An interesting case where the court considered a donor’s intentions regarding a gift made for a specific purpose and how a change in circumstances reversed the gift back to the estate

This case concerned the redevelopment of a primary school in Nettlebed, Oxfordshire. The land upon which Nettlebed primary school originally stood had been gifted to the local authority for its use as a school by the estate of Robert Flemming in the early 20th century.

Anna Morris recently considered the outcome of this case in further detail in an article for Today’s Wills and Probate, a link to Anna’s article can be found here and a copy of the judgment in full can be found here.

We’re here to help

Many members of our team are trustees of charities themselves and have first-hand experience of the challenges facing charities today. We also know that legacy donations form an increasingly large part of a charity’s income. If you have a dispute around a legacy donation then we can help – contact Andrew Wilkinson or Debra Burton for support.

As well as having broad expertise in charity law, our dedicated charity team can support charities with issues such as employment law, funding and corporate advice, intellectual property considerations and real estate advice.

Our charities team is ranked as Top Tier firm in the Legal 500 2021 edition.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND. 

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

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