Failure of Gifts Flashcards
Reasons for failure
Ademption - where specific item has been disposed of before death
Abatement - where insufficient funds in estate to pay all legacies
Lapse - beneficiary has predeceased testator
Disclaimers - beneficiary refuses to accept legacy
Forfeiture - special rules applies when beneficiary has killed testator
Ademption
- specific gift is made, fails if subject matter of gift doesn’t form part of estate at date of death - sold it, gave away or destroyed. Beneficiary gets nothing in compensation.
- can try and overcome by saying “I give my house, the Willows or any house I may own at the time of my death to X”
- if unclear whether death or destruction occurred first, item deemed to have perished before test so gift adeemed - Durrant v Friend 1852
> Re Slate 1907 - prop may change in nature. Was stock for one company, but was taken over by another company. If gift specific, will took effect from death and as stock different, adeemed. Wouldn’t occur if subject matter of gift changed in form only, but substance remained same.
> Re Clifford 1912 - before died, co changed name and sub-divided each share. Held as change in form not substance, ben took shares that represented those already given
> Re Leeming 1912 - co went into liquidation, set up a new company and shares turned into different types. Ct held ademption not occur as change was form not substance. If change was from shares to debenture, that is change of substance.
> Re Dorman 1994 - legacy of balance on bank deposit acc. attorney closed acc and opened new acc with same bank to get higher interest rate. Normally closure means adeemed, but held change was form only so allowed.
> Soukun v Hardoyal and Others 1999 - specific gift of money from life assurance policy adeemed when original policy had expired and took out new one as it was change of substance.
- contract for sale of specific gift would cause to adeem even though not completed until after death. Legally binding on PRs so bens can only enjoy it until completed and have no right to proceeds of sale. not when test had made contract to sell before will executed, in that case bens entitled to proceeds of sale - Re Calow 1928
> Re Sweeting (Deceased) 1988 - had land and yard that he had made specific devises for, but contracts had been exchanged before died and conditional on certain things had to be done before death. Wife gave consents before death and completed after death. Concluded law in Lawes v Bennett 1785 applied, specific legacies adeemed and proceeds went into residue.
Public Guardian v JM 2014 - problems can arise when attorney instructed, but statutory Wills can be made instead (under Mental Capacity Act 2005).
Ademption and option to purchase
- If test gave someone option to buy prop within 3 months of grant, then prop will be subject to a specific gift. Then:
- exercise of the option, even after test death, converts the real property into personalty (money) from date of grant of option - Lawes v Bennett 1785
- Specific devise of prop is adeemed, but rent and profit due from date of death until exercise of option goes to X (Re Marlay 1915). Proceeds of sale go to residue.
- asset deemed to have converted from date of grant of option for sale proceeds, but for purpose of determining entitlement to income, asset treated as converted at date of exercise of option. Specific devisee would take sale proceeds if:
. Will made after the grant of the option - Drant v Vause 1842
. Will is confirmed by a codicil after the grant of the option - Emuss v Smith 1848
. Making of the Will and grant were contemporaneous - Re Pyle 1895
Interpreting gifts - S24 Wills Act 1837
- s24 WA 1837 - how gifts should be applied - Will speaks from death so must be interpreted in way as if test made if just before dying in light of prop owned at that date.
- also states that principle wont apply if will shows contrary intention.
- in absence of contrary intention, prop acquired after date of Will may pass under devise or bequest in Will.
>Re Kempthorne 1930 - “all my freehold land” passed freehold land that owned at death, not
just at time Will made.
>Re Bancroft 1928 - bequeathed “all my rights in connection with the play Diplomacy to X”, but entered into contract selling right, died before completed. Held words spoken from death, so X got benefit of contract.
>Bergliter v Cohen and Others 2006 - clause in ill allowing B to occupy one of homes for life was invalid as test didnt occupy that property as home at time of death.
Interpreting gifts - contrary intention
- S24 states must appear from Will itself, but Ct willing to take into account evidence of surrounding circumstances
- Words indicating present time, such as “now” amount to contrary contention
> Re Edwards 1890 - test left to A “my leasehold house and premises.. where I now reside”. Afterwards, part of prop separated and had tenant in there. Ct held contrary intention applied and A could take whole prop as construed as prop at date of Will.
> Re Willis 1911 - “all my freehold land at X and known as Y and in which I now reside” - later purchased 2 other plots which fell into description. Prop was clearly described without ref to the present time so didnt amount to contrary intention and beneficiary took additional pieces of land - Gift comprises prop that capable of being increased and decreased, the use of “my” didnt show contrary intention to exclude s24 so all prop within description at date of death passes in absence of all other evidence to contrary.
- Will refers to single specific asset and circumstances show test meant that particular asset, there will be contrary intention.
>Re Gibson 1866 - specific legacy of “my one thousand north British Railway preference shares”, after Will sold those shares and bought greater number of shares. Ct held wording showed contrary intention therefore was adeemed.
>Re Sikes 1927 - gift of “my piano” in light of evidence of surrounding circumstances, taken to mean piano at date of Will, so if sold then admeed, could claim new piano only if will made clear was entitled to replacement.
> Re Reeves 1928 - bequest of “my present lease”, had 3.5 years left to run at date of Will, on expiry test effected renewal and executed codicil confirming Will. Words construed as speaking from date of codicil which republished Will so legatee took new lease.
- doesnt apply to description of persons - for ex “my brother’s Wife”, and its taken as person answering the description at date of Will - Re Whorwood 1887
- Will may contain contrary intention
>Re Daniels 1918 - gift to “Lord Mayor of London for the time being” was construed as referring to whoever held office of Lord Mayor at date of death.
Disclaimer
-beneficiary not obliged to take gift but can disclaim.
- cant disclaim if by conduct or by deed, he has accepted - Re Hodge 1940
- can’t accept part of gift and disclaim rest where gift is single and undivided - Guthrie v Walrand 1882 - but can if separate legacies.
- disclaimer can be retracted provided no one altered position as result of disclaimer, but can’t before death.
- If does, disclaimer ineffective - Smith v Smith 2001.
- if disclaimed, property passes as if gift or entitlement has failed.
- if death after 1 Feb 2012, has been given statutory effect by Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Act 2011. S1 provides what happens if person entitled on intestacy disclaims.
-s2 deals with where disclaiming person is ben of a Will, then disclaiming person treated as having died immediately before test. Terms then considered to determine who entitled to property by applying usual rules of construction, unless will has substitution provision
- not entirely certain as says fictional predeceasing of disclaiming ben is for purpose of the act, which ref to WA 1837. If person disclaiming is child or issue, s2 have implications due to s33 WA 1837.
- as s2 refers to person who disclaims, would appear intended to apply regardless of identity, but should have words to say fictional predeceasing was for purpose of Will, then would apply clearly whether issue.
- can be avoided by writing post-death variation, allows ben of full age and capacity to redistribute to whoever they want, whether to bring ben omitted into the Will or provide additional benefit for current one. If infants do this, need court approval of variation and will only do if satisfied that is for infant’s benefit.
Lapse
- if ben predeceases test, gift to ben lapses. Cant be prevented by general declaration but were is substitutional gift then pass to substitutional ben.
- republication by codicil after death of ben doesn’t save gift from lapse.
- also can lapse if ben doesn’t meet conditions - such as reaching age of 15 for example and gift would fall into residuary estate.
- if no contingency attached to gift, then would be vested gift and wouldn’t cause gift to lapse so would belong to child instead and would devolve into their estate.
Joint tenancy and tenancy in common gifts
- if gift made to ben as joint tenants, and one predeceased or witnesses Will, their share passes to surviving joint tenants.
- gift will lapse where sole surviving joint tenant predeceases testator and no substitutional gift
- if gift made as tenants in common, share of ben who predeceases will lapse - Page v Page 1728
- Most gifts by will to more than one are tenants in common “to A and B equally” or “to A and B in equal shares”
Class gifts
- defined by Lord Selbourne in Pearks v Moseley 1880 - gift to several persons uncertain in number at the time of limitation who answer to a general description and who are to take one divisible subject in proportionate shares the size of which will vary according to number of ultimately answer the description.
- “gift of £90k to my children” would be class gift as share determined by no of children. “10k to each of my children” not class gift as benefit of each fixed by Will and will be same however many survive.
- lapse doesnt apply to class gifts and those who survive and make up the class will inherit.
- membership of class, certain class-closing rules, rules of construction used in interpreting Will set out in Pearks v Moseley. Have evolved because of need to avoid lengthy delays in distributing, so apply subject to contrary that might be expressed in Will.
Rules deal with no of situations:
- If gift is immediately vested to each member of class “to all my nephews and neices”, class closes on testator’s death, if any member of class is alive at that time, so no one born later (apart from child en ventre sa mere) can take share - Viner v Francis 1789. If no member of class alive at time, remains open indefinitely - Weld v Bradbury 1715.
- If class gift vested remainder after life interest, class closes when life tenant dies, if any member of class alive at time - Ellison v Airey 1748.
- if no member obtained vested interest at time, class remains open indefinitely. if life interest fails, gift interpreted as if immediate legacy. if life interest ended by disclaimer, different outcome as can confirm who takes it. Should be class closes on death of life tenant instead - Re Harker’s Will Trust 1969, Re Kebty-Fletcher’s Will Trust 1969 - if gift immediate contingent legacy (“to all my nieces and nephews who reach age of 18”), class closes at test death if any ben satisfied contingency - rule in Andrews v Partington 1791. Other bens alive or en ventre sa mere also inherit if they eventually satisfy the contingency. if no ben satisfied when test died, class closes when first ben satisfies contingency.
> Blech v Blech 2004 - B died in 1977, made will 1975 leaving prop in trust for 3 kids, executed codicil establishing trust for such children of son R, who survive her and reach 21. At date of Will, R had 2 kids, after died, R divorced wife and had 2 more kids. Ct held additional kids inherit as circumstances showed meant all of R’s kids.
- If legacy is contingency remainder “to A for life, with remainder to such of nephews and nieces who reach age of 18”, class closes on death of life tenant if ben satisfied contingency and no ben born afterwards can inherit, otherwise remains open until first ben satisfies.
S33 Wills Act 1837
- provides exception to doctrine if lapse if prop left in Will to their children or remoter issue. States:
Where a Will contains a devise or bequest to a child or remoter descendant of test, and the intended beneficiary dies before the testator leaving issue, and the issue of the intended beneficiary are living at the testator’s death, then unless contrary intention appears in Will, devise or bequest shall take effect as a devise or bequest to issue living at testator’s death.
-s33(4)(b) said that illegitimacy of any person is ignored, so legacy to an illegitimate child may be saved by s33 and illegitimate issue of ben may save gift from failure.
-“living at death” includes unborn children en ventre sa mere at death - s33(4)(b).
- s33(2) provides that where member of a class of children or remoter issue predeceases testator leaving issue at death of testator, gift takes effect if the issue were included in the class.
s33 WA 1837 - contrary intention
- s33 can be excluded by contrary intention in Will. If Test doesn’t want issue to take entitlement, they can make clear in Will. Professional Will writers should seek instructions on whether want issue to benefit or not.
- words used in Will may give rise to doubt where s33 has been excluded.
>Rainbird v Smith 2012 - Will left residue “upon trust for such of them, my daughters, R, J and S, as shall survive me and if more than one in equal shares absolutely”. Ct held that s33 excluded, as “as shall survive me” and ..”my daughters..” made it clear intention was to leave it to only daughters that survived and not issue.
> Hives v Machin 2017 - made Will leaving residue to her sons, “who shall be living at the date of my death” in equal shares. 2 kids died before mum, one leaving child. Evidence was required to confirm intention as Will not clear, and lawyer drafting Will acknowledged that had not explained s33 implications so was impossible to infer whether she wanted it, so it was not excluded.
s33 WA 1837 - applying s33
- Statutory substitution in favour of ben’s surviving issue applies only if the gift was to test’s child or remoter issue (grandchild) in first place. DOES NOT APPLY FOR ANY OTHER RELATIVE, I.E. BROTHER.
- Only applies if child or remoter issue predeceases test - not apply if survive and die afterwards. Exception where treated as having predeceased even if not (disclaimer/forfeiture)
- Where does apply and issue of initial ben takes entitlement, nothign in s33 to say that issue must attain 18 or marry. - would only apply where it was a class gift then any issue joining the class will have to satisfy the contingency imposed by test, like other class members.
- Doesn’t apply automatically, takes effect subject to any contrary intention, sometimes it is expressly excluded in Will.
- One situation where can still apply even if issue dies after test - s2 EDP(FRLS)A 2011 if died after 1 Feb 2012. Intended to preserve inheritance rights of person’s descendants if disclaims or disqualified from receiving. Prop will devolve as if person disclaiming or disqualified has immediately died before test so if person in question was child, their issue will receive it.
Statutory presumption as to survivorship - Commorientes
- 2 or more people leave prop to one and other, but die at same time and no indication as to who died first - needed to decide whether lapse occurred.
>Underwood v Wing 1855 - left prop “to X if my wife shall die in my lifetime”, but both died when swept off deck in storm, and as no evidence who died first, X couldn’t benefit. - s184 Law of Property Act 1925 says if that situation happens, then for all purposes affecting title to property, be presumed to have occurred in order of seniority and younger shall be deemed to have survived the elder.
> Hickman v Peacey 1945 - 2 brothers left prop to each other, bomb hit and killed both. House of Lords said that slightest degree of uncertainty invokes presumption, so presumed older to have died first.
- any satisfactory evidence to actual order of deaths will exclude operation of s184 - burden of proof is on balance of probabilities.
> Lamb v Lord Advocate 1976 - Ct must be satisfied that on evidence before it, the order of deaths is uncertain. H & W in house fire, H (elder) had been gassed previously and W fitter, so likely she went out to get help, went back in to get him, he had died then she died. On balance of probabilities, pointed to that conclusion and no scope to invoke statutory presumption.
> Re Scarle 2019 - elderly couple both died of hypothermia in home, Mr was 79, Mrs was 69. Medical evidence couldnt determine who died first, so burden on party seeking to establish order of death, on balance of probabilities. Mr’s daughter unable to evidence that Mrs died first, so s184 LPA 1925 applied and joint assets went to Mrs’ daughter.
- also applies where person dies intestate.
- s184 doesnt apply where spouses or civil partners died intestate in respect of prop passing under intestacy rules. S46(2A) AEA 1925 says surviving civil partner must survive for at least 28 days before inheriting, but if didnt, second one to die treated as predeceasing the other, but doesnt apply to joint property. Instead, s184 applies and joint prop passes to estate of younger by survivorship. Can include survivorship clause in Will.
> Re Rowland 1962 - homemade Wills, H&W made saying each was to take prop of other save “in the event of the decease of my wife preceding or coinciding with my own”. Ct of A held statutory presumption applied.
Forfeiture
- principles developed denying benefit to a person who seeks to benefit from a crime.
>Gray v Barr 1971 - set out broad principle that “no man should be allowed to profit at another person’s expense from his own conscious and deliberate crime”. Also applied in Re Crippen 1910 and In the Estate of Hall 1911-1913. - before Forfeiture Act 1870, interest was forfeited to Crown, but since 1870, law will not assist criminal to recover prop from estate of person they killed, whether left Will or intestate.
- applies in cases of murder (unless ben insane) and manslaughter where was deliberate, unlawful or intentional violence - Re H (Deceased) 1990
Forfeiture Act 1982 - gives Ct discretionary power to grant relief to those convicted of crime except in case of persons guilty of murder (s2(1)).
>Dunbar v Plant 1997 - survivor of 2 person suicide pact would not be subject to forfeiture as FA 1982 allowed Ct to exercise discretion.
- S2(5) FA 1982 says that Ct may modify effect of forfeiture rule.
>Re K (Deceased) 1985 - enabled Ct to grant total relief from rule. Shot by wife, convicted of manslaughter, Ct prepared to grant relief from rule on basis there was evidence that Def provoked the killing, Ct had power to dispense of altogether or modify it however they wanted.
> Re Land 2007 - held that no discretion to extend time limit for application for relief from forfeiture and rule of public policy applied to all cases of unlawful killing except where finding of insanity. Ct also held that s3 gave Ct discretion to mitigate effect of rule even when Will made provision.
> Re Royse 1985 Ct held otherwise, but s3 not in force.
- application for relief under FA 1982 must be made within 3 months of conviction (s2(3)).
- dont preclude killer from applying for provision under I(PFD)A 1975, unless convicted of murder (ss3 and 5 FA 1982)
Forfeiture - Reform of consequences of law of forfeiture
> Re Jones 1998 - left estate to son with substitutional gifts to nephews if predeceased. Son convicted of manslaughter of mum so forfeit right to inherit. Decided to construe Will as if son had predeceased, but wasn’t correct, so gifts didnt pass to nephews as conditions were not met, went on intestacy.
> Re DWS (Deceased) 2001 - son murdered both parents, died intestate. Couldnt inherit as murder, but grandchild claimed to be entitled under s47 AEA 1925, but held could only inherit if son predeceased and he didn’t so estate passed as if no issue.
- Since then, EDP(FRLS)A 2011 applies if deceased dies on or after 1 Feb 2012 - preserves inheritance rights of persons descendants if that person disclaims or disqualified as result of forfeiture.
- s1 EDP(FRLS)A 2011 - if person entitled is disqualified, prop devolve under intestacy rules as person had died immediately before intestate, so person leaves issue capable of taking under stat trusts, they will inherit.
- s2 deals with situation where disqualified person ben in Will, outcome exactly same.
- implications for app of s33 WA 1837 and where disqualified ben someone other than test child or remoter descendant.
-EDP(FRLS)A 2011 - preserves power of Ct to modify effect of forfeiture rule if justice of case requires
