Actions by Beneficiaries and Interested Parties Flashcards
what are the possible actions?
- issuing a caveat
- issuing a citation
- passing over
- compel administration
- request to see accounts
- personal action against PRs
- family provision claim
when can B issue a caveat?
- Bs can issue a caveat against the estate where they have just cause
o i.e. concerns as to E’s capability or validity of the will
re: caveat
what effect does this have?
- No GOR can be issued until it has been removed or no longer effective
re: caveat
what can someone who wants to obtain GOR do? what is the process following this?
- Someone who wants to obtain a GOR can issue a ‘warning’ to the caveator
o The caveator has 14 days to enter an ‘appearance’. If they do not, the applicant can request PS remove the caveat
o If an appearance is entered, the caveat can only be removed by consent or court order
re: caveat
how is a caveat lodged?
- Form PA8A or online
re: caveat
how long does it last?
- Caveat lasts 6 months and can be extended
re: citation
what is this?
a method to force a party with a right to GOR to act.
re: citation
how is this obtained?
- B (the citor) applies to HMCTs to issue the relevant citation
re: citation
what are the different ones?
- Citation to take Probate
- Citation to Propound Will
- Citation to Accept or Refuse a Grant
re: citation (probate)
when is this used?
Used where has E lost their right to renounce by intermeddling and they haven’t applied for GOP within 6 months of DOD
re: citation (probate)
what is the process?
- B can apply for a citation to be issued against E for them to take out a GOP (unless there are ongoing proceedings related to the validity of the will)
- If E does not apply for GOP, B can apply to the court for an order that E must take GOP within a certain time or for them to be passed over
re: citation (propound will)
when is this used?
- i.e. B becomes aware of a will which adversely affects their interest under an existing will or IR. B can cite the Es and all persons interested in the later will to propound it.
re: citation (propound will)
what is the process?
If the citees fail to enter an appearance or propound the will, the citor can apply to the court for GOP as if the later will is invalid.
re: citation (accept/refuse grant)
when is this used?
- Used to ‘clear off’ a person with a prior right to take a grant where they have not renounced
- Anyone entitled to GOR can issue this citation
re: citation (accept/refuse grant)
how does this work?
- If the citee does not take out GOR, the citor can apply for GOR to be issued to them
explain passing over
- Bs can apply to the court for an order ‘passing over’ an E and appoint someone else to administer the estate
when will the court ‘pass over’ an E?
- A court will order this if it is ‘necessary and expedient’
how are Bs to a trust and Bs to a will different?
- Unlike Bs to a trust, Bs to a will do not have an equitable interest in the property until it is transferred to them, so they cannot demand that property be transferred to them
what entitlement do Bs have during administration?
- During administration, Bs only have entitlement to a chose in action i.e. the right to require the estate be duly administered
what are the time limits before Bs can call for the estate to be administrated?
PRs have 1 year from DOD before they can be called to distribute the estate
o Called the ‘executors’ year’ but applies to all PRs
o PRs may be able to justify a delay
what is PRs duty in relation to accounts?
- PRs must keep accurate records of accounts and receipts
explain ‘request to see accounts’
- Anyone interest in the estate can ask to inspect the accounts
- If PRs refuse or they are unclear/inaccurate, anyone interested can apply to the court for an order compelling PRs to provide an inventory & accounts
what is the position regarding ‘request for information’?
- PRs are not required to disclose their reasons for a decision
- However, if they refuse, Bs can apply to the court
- Documents may be revealed as part of litigation or subject access request
what administration actions can be brought against the PRs? who can bring these?
- These actions can be brought by anyone interested in the estate
1) Applications limited to a particular issue i.e. PRs clarification of the will
2) Applications for general administrative order i.e. the court supervises PRs and they cannot exercise their power without the court’s permission.
o This is rare and a last resort
what are the personal actions which could be brought?
- breached of fiduciary duty
- devastavit
what is the position regarding personal liability of PRs?
- Generally, PRs are only liable to the extent of assets in the estate. However, if they have breached their duty they are personally liable to Bs/creditors
are PRs liable for breaches committed by other PRs?
- PRs generally aren’t liable for breaches committed by co-PRs
explain breach of fiduciary duty
Same rules as when a trustee breaches FD, the only difference is if there is authorisation it would come from the will, not a trust
when can a devastavit claim be brought and by who?
- Bs and creditors can bring a claim for devastavit where their breach of duty has caused loss to the estate
re: devastavit
what is the test as to whether this claim can be brought?
o Test has the breach has caused loss? Not whether the PR is culpable.
re: devastavit
on what grounds can this claim be brought?
- Grounds for the claim (can be more than one):
o Misuse of assets
o Maladministration
o Negligence
re: devastavit
give examples of misuse of assets
PRs taking assets for themselves. This would apply even where the PR thought they were a B (i.e. under IR) but they were not
re: devastavit
give examples of maladministration
fail to collect estate, not distributing as per the will, failure to monitor investments which leads to loss
re: devastavit
explain negligence
carrying out duties without taking reasonable care
re: devastavit
give an example when a creditor might bring this claim
Bs are paid before creditors, failure to preserve assets, funeral costs are excessive, paying debts of an insolvent estate incorrectly
re: devastavit
what are the defences?
o The court has discretion to totally or partially relieve a PR of liability if they acted honestly and fairly and ought to be excused for the breach and failure to obtain court directions in relation to the breach (s61 TA 1925)
o If there is an exclusion clause in the will which states PRs will not be liable
o Acquiescence of Bs i.e. they had full knowledge and consented
o Limitation
o Protection under s27 TA 1925 (if relevant)
re: devastavit
explain the limitation defence
o 12 years from the date the right to receive the property arose
n/a to fraud or where the PR has taken property for themselves
what can B do if the estate is distributed to someone who is not entitled?
If PRs distribute assets to someone who is not entitled, B or a creditor can follow the assets into the hands of the recipient
B/creditors can bring a devastavit claim against the PRs or the above. If the PRs can only repay some of the loss, they might bring one of these claims to recover the rest.
re: following and tracing
what are the two possible remedies? what are the time limits?
proprietary claim
personal claim for compensation against the recipient (last resort)
Time limit for both claims is 12 years
re: following and tracing
explain proprietary claim
Proprietary claim against the recipient to recover property/traceable proceeds unless they are a bona fide purchaser for value
re: following and tracing
explain personal claim
Personal claim for compensation against the recipient (last resort)
how can PRs be removed?
- Once GOR is granted, PRs can only be removed/substituted by court order
when will the court remove a PR?
- The court will exercise this discretion if it is necessary for the welfare of the Bs
- A sole PR will not be removed without a replacement
who can make an application to remove a PR?
- Applications can be made by Bs or PRs
what is the position regarding claims against D?
- Causes of action against D continue against the PRs, however they are only liable to the extent of the estate
- The limitation period for straightforward contract claims is 6 years
re: family provision claim
what is this?
- Certain categories of people can apply to the court to claim part of the estate on the grounds where the will/IR does not reasonably provide for them
re: family provision claim
if the person cannot argue this claim, what might they try and argue instead?
- Alternatively, C can try to argue that a will was invalid by execution etc
re: family provision claim
what are the conditions to make this claim?
- D must have been domiciled in England and Wales
- C must be fall within one of the categories
re: family provision claim
what are the categories?
a. Spouse/CP
b. Divorced former spouse/CP
c. A child of D
d. A non-biological child where D assumed a parent role
e. Anyone maintained wholly or partly by D immediately before death
f. Anyone living with D in the same household for the whole 2 years immediately prior to death and living as a spouse/CP of D
re: family provision claim
explain ‘a. spouse/CP’
if they are no longer together but not divorced, the spouse/CP would claim under this category
re: family provision claim
explain ‘b. divorced former spouse/CP’
NB: they cannot claim if on divorce/dissolution the court made an order barring them from making this claim
re: family provision claim
explain ‘c. a child of D’
any age and inc. adopted children
Minor claim more likely to be successful
Adult claim if they have earning capacity for the foreseeable future, they are unlikely to succeed unless there are special circumstances i.e.:
D owed a moral obligation;
Child has a disability;
Child worked for D for many years on a low wage;
Child made sacrifices to care for
re: family provision claim
what is the position regarding a claim from a minor child
more likely to be successful
re: family provision claim
what is the position regarding a claim from an adult child
if they have earning capacity for the foreseeable future, they are unlikely to succeed unless there are special circumstances i.e.:
D owed a moral obligation;
Child has a disability;
Child worked for D for many years on a low wage;
Child made sacrifices to care for D
re: family provision claim
explain ‘e. anyone maintained wholly or partly by D immediately before death’
give an example
C must prove they have a financial dependency on D
Maintained = a substantial contribution in money or money’s worth towards the reasonable needs of that person, unless there was full consideration pursuant to a commercial arrangement
i.e. rent-free accommodation YES vs. paid housekeeper NO
re: family provision claim
explain ‘d. non-biological child where D assumed a parent’
i.e. step-child or child of a cohabited
C must prove D acted as a parent towards them
re: family provision claim
if C would fail under f, what might they be able to do?
If a cohabitant would fail under f) because they haven’t lived together for 2 years, they might succeed under this ground if being maintained
re: family provision claim
explain ‘f. anyone living with D in the same household for the whole 2 years immediately prior to death and living as a spouse/CP of D’
Must have been living together as one unit (i.e. as a couple). If they were living under the same roof but as two entities, the claim would fail
re: family provision claim
what are the questions for the court in relation to ‘f. anyone living with D in the same household for the whole 2 years immediately prior to death and living as a spouse/CP of D’
Q for the court ‘would a reasonable person with normal perceptions regard them as living together as spouses/CP?’
Relationship must have a degree of permanence and commitment
Claim will not necessarily fail if they don’t have sex
Relationship must be openly acknowledged
re: family provision claim
explain ‘immediately prior to death’
a temporary break in maintenance before death doesn’t stop a claim
re: family provision claim
what are the time limits to bring this claim?
- An application can be made anytime before the GOR is issued, but must be made within 6 months of issue
re: family provision claim
how can C check whether GOR has been issued?
- C can search by post or online to check whether GOR has been issued.
o ‘Standing search’ C is notified of any GOR issued in the next 6 months
re: family provision claim
when will the court extend the time limit? what will they consider?
The court can extend the time limit if there is good reason for delay. Factors:
o Merits of the application
o How promptly they sought permission
o Whether the estate has been distributed
o Where PRs & Bs have notice of a possible claim within the time limit
o If C would have another remedy if refused (i.e. sue a negligent solicitor)
re: family provision claim
what are the grounds for this claim? who has the BOP?
- 1 ground disposition of D’s estate doesn’t make reasonable provision for C
- The BOP is on C to prove this.
re: family provision claim - grounds
explain ‘reasonable’
- ‘reasonable’ is objective. There are two standards depending on whether C is a spouse/CP or any other claimant
the s3 guidelines help the court determine if provision is ‘reasonable’
re: family provision claim - grounds
explain reasonable in relation to a spouse/CP
financial provision that is reasonable in the circumstances, regardless of whether or not it is needed for maintenance
Relevant factor how much they would have got on divorce
re: family provision claim - grounds
explain reasonable in relation to all other claimants
financial provision that is reasonable in the circumstances for C to receive for their maintenance
Maintenance = payments for C to discharge their cost of living (recurring expenses i.e. rent, food, heating) at a standard of living appropriate to them
If C can afford these from their own resource, the claim will fail
re: family provision claim
explain the s3 guidelines
- The s3 guidelines help the court determine if provision is ‘reasonable’
- There are ‘common guidelines’ applicable to all and ‘specific guidelines’
re: family provision claim
how does the court consider the facts?
- The court considers the facts as they are at the date of the hearing
re: family provision claim
what are the s3 common guidelines?
- Financial resources and needs of C, other Cs and Bs now and in the future
- D’s obligations towards C or B
- Size and nature of the estate
- Anything else relevant
re: family provision claim - s3 guidelines
explain ‘financial resources and needs of C, other Cs and Bs now and in the future’
i.e. earning capacity, any impact on state benefits and financial obligations and responsibilities
re: family provision claim - s3 guidelines
explain ‘D’s obligations towards C or B’
inc. legal and moral obligations i.e. D inherits estate from wife on the basis he will give this to her daughter. D does not. The daughter could argue D had a moral obligation.
re: family provision claim - s3 guidelines
explain ‘size and nature of estate’
larger = more likely to be successful
re: family provision claim - s3 guidelines
what are the special guidelines in relation to spouse/CP?
C’s age, C’s contribution to the family, duration of the marriage/CP, likely financial settlement on the end of marriage/CP
re: family provision claim - s3 guidelines
explain ‘anything else relevant’
- i.e. conduct of C (eg. estrangement), if D gave reasons as to why C wouldn’t inherit, the court can decide how much weight to attach.
o If B has killed D, they forfeit their right but could still try to bring this claim, clearly their conduct would be relevant.
re: family provision claim - s3 guidelines
what are the special guidelines in relation to a child?
education and training requirements
re: family provision claim - s3 guidelines
what are the special guidelines in relation to a cohabitant?
C’s age, length of cohabitation, their contribution to the family
re: family provision claim
what orders can the court make?
- The court has a wide discretion to make an order against the net estate i.e. transfer of property, periodical or lump sum payments
re: family provision claim - orders
what is the net estate?
inc. property which passes by survivorship and property which D has given away in the 6 years prior to D’s death with the intention of defeating a family provision claim
re: family provision claim - orders
what will the order confirm?
- Court will declare how the burden will be borne i.e. which Bs will be affected
re: family provision claim - orders
what may the PRs need to do if an order is made?
- IHT may need to be recalculated
re: family provision claim - orders
what happens if the estate has been distributed within 6m of the issue of GOR?
- If PRs distribute the estate before 6 months of issue of GOR, they are personally liable to C if there are insufficient assets in the estate
re: family provision claim - orders
what happens if the estate has been distributed after 6m of the issue of GOR?
- If PRs distribute the estate after 6 months of issue, the PRs not liable. If C is successful, property can be recovered from B.
re: redirecting estate property
why might B do this?
- B might want to redirect property if they feel another has been unfairly excluded, they need a larger legacy, IHT purposes, threat of a claim
re: redirecting estate property
how can this be done and what does this apply to?
- B can make a lifetime gift
- B can disclaim
- B can make a variation
- s142
Applies to wills and IR
re: redirecting estate property
explain lifetime gift
- If B wants someone else to benefit from the property, they can make a lifetime gift to someone (need to consider tax consequences)
re: redirecting estate property
explain disclaiming entitlement. what is the effect?
- B rejects their entitlement the property passes as if B had predeceased T.
- B would need to check the person they want to inherit will do so if they do this
re: redirecting estate property
explain variation
- B can direct who will receive the property and on what terms
re: redirecting estate property
what property can a variation be used against?
- Can also be used in relation to joint property passing under survivorship
- Can be used in relation to part of a gift and if B has received benefit from it
re: redirecting estate property
what property can B not disclaim?
- B cannot disclaim only part of a gift and they cannot disclaim once they have accepted a benefit
re: redirecting estate property
when can a variation be made?
The original B must be sui juris. If they are not, a court application is required.
The court can consent on behalf of infants and those who lack capacity if the variation is for their benefit (i.e. considerable tax saving)
Court applications are expensive and time consuming
re: redirecting estate property
explain s142 and its effect
- S142 allows variations and disclaimers to be ‘read back’ into the will, the effect of this is as if D gave the money directly to the new B
re: redirecting estate property
what would happen if s142 wasn’t used?
- IHT and CGT liability arises when there has been a ‘transfer of value’, therefore if the disposition wasn’t ‘read back’ into the will, then tax would be payable on death and when B varies/disclaims the gift
re: redirecting estate property
what are the requirements to use s142?
The disclaimer/variation must be:
o In writing and signed by original B
o Within 2 years of D’s death; and
o Not made for a consideration in money or money’s worth
o The variations must state that s142 is to apply
o If more tax is payable, the PRs must also join the written variation
re: redirecting estate property - s142
when might more tax be payable? if so, what is required?
More tax might be payable in situations where D leaves the estate to S/CP and so benefit from the spouse exemption. If the S/CP varies/disclaims (i.e. their children), the exemption would be lost and more tax would be payable.
If more tax is payable, the PRs must also join the written variation
