A round-up of legal updates for the Wills and probate industry over the past month is as follows.
Estate administration – change to the legal definition of “treasure”
The government has announced that the legal definition of “treasure” in the Treasure Act 1996 will be expanded. Currently, the definition includes that objects must be “at least 300 years old” and made “from precious metal” but this is set to change to “objects of historical importance more than 200 years old“, made of any type of metal. The change will make the discoveries of treasure easier for museums to acquire, and should help avoid significant historical artefacts ending up in private hands. The development will be relevant for landowners (or their estates) with land on which treasure has been found or is being sought. Under the Treasure Act 1996, any treasure found on the land will belong to the Crown and landowners or the finders will need to pass the object to the relevant authorities. Depending on the circumstances, the finder and/or the landowner may receive an ex gratia reward. If approached by a metal detectorist wanting to undertake a search on their land, it is advisable for landowners to have a written agreement in place, and consider taking legal advice in relation to the terms on which permission is granted and the steps that will be taken when treasure is found, including the apportionment of any reward or, if the treasure is not acquired by a museum but returned to the finder, how the landowner will be compensated. Wedlake Bell has recently expanded its Art & Luxury practice and has a dedicated team of specialists who can advise on the legal issues (contentious and non-contentious) associated with art, luxury and cultural assets. The team’s client base includes landowners and estates as well as artists, private collectors and international art galleries through to collector car dealers, fine wine and yacht financiers. Likely change to the definition of treasure to protect more UK artefacts, Tamara Bell (wedlakebell.com); EPrivateClient – Wedlake Bell adds art and luxury team from Charles Russell Speechlys (paminsight.com)
Contentious estates – delay as a defence in probate claim
McElroy v McElroy, 2023 EWHC 109 Ch is a case that demonstrates the circumstances in which the doctrine of laches can be used to defeat a probate claim. In this case, the brother of the deceased made a claim to revoke a grant of letters administration made to the deceased’s widow nine years previously. The estate had been fully distributed to the widow. The brother argued that the deceased had been domiciled in Scotland at his death, meaning that a previous Will he made before his marriage should not be treated as revoked under Scottish law and remained valid. That Will made the brother the sole beneficiary of the £490,000 estate. Laches can be raised where the claimant has delayed asserting their rights such that it would be unfair for the court to grant relief. The doctrine is generally an equitable defence and the court decided that it was possible for the defendant to raise it in this case. The amount of time that had passed since the completion of the administration made it unconscionable for the brother to recover from the widow the estate assets she had received. The fact that the brother had no good reason for the delay, was also a factor. Delay is valid defence to probate claim in certain circumstances (High Court) | Practical Law (thomsonreuters.com)
Contentious estates – forged letter of wishes
A man who forged a letter of wishes has received a prison sentence of five years. The forged letter made the man the sole beneficiary of the estate and gave him £2,186,079 as an inheritance, at the expense of an air ambulance charity which would otherwise have benefited under the Will. The solicitors to whom the letter of wishes was produced after the deceased’s death were suspicious as to its validity and began an investigation. The court decided that the deceased did not have sufficient mental capacity to have understood the letter when it was purported to have been signed by her. The two witnesses to the letter of wishes provided sworn affidavits confirming they had signed the letter after the deceased, but later confessed they had signed it after her death. The Crown Prosecution Service commented that: “We hope this sentence sends a strong message that anyone seeking to take advantage of vulnerable people, particularly for financial gain, will be prosecuted.” Scammer jailed for trying to steal £2.1m left by friend to air ambulance charity | The Independent
Trusts – Trust Register and unauthorised unit trusts
HMRC has updated its Trust Registration Service (“TRS“) Manual (TRSM10030) to confirm that there is no specific exclusion from registration for unauthorised unit trusts. Trusts created in the course of professional services or carrying out commercial transactions including authorised unit trusts are excluded. The development will affect Jersey property unit trusts (“JPUTs”) because JPUTs are likely to be liable to stamp duty land tax and are therefore registrable taxable trusts for TRS purposes; alternatively, if the JPUT does not yet have a liability to UK tax, it will be registrable as a non-taxable trust if the trustees have acquired UK land on or after 6 October 2020. HMRC’s current guidance is that a penalty will not be applied unless the failure to register is due to the “deliberate” behaviour of the trustees. Whilst reliance on the previous guidance should indicate non-deliberate behaviour; now that the guidance has been changed, JPUT trustees should register their affected trusts as soon as possible to avoid a penalty of up to £5,000 per offence. UK TRS rules changed to include Jersey property unit trusts | STEP; EPrivateClient – HMRC updates its guidance on whether offshore unit trusts need to register on the TRS (paminsight.com); TRSM10030 – Introduction to the Trust Registration Service: contents: common types of trusts and interaction with the register – HMRC internal manual – GOV.UK
Estate administration – review of funeral services
The Competition and Markets Authority (“CMA“) has published its first annual review of market outcomes in the funerals sector. The Funeral Markets Investigation Order 2021 had implemented a package of remedies to address problems with competition within the sector including the introduction of transparency rules. The CMA concludes in their review that the transparency rules are having a constraining effect on funeral prices after many years of real-term rises. Review of funerals market – GOV.UK (www.gov.uk); CMA publishes review of outcomes in funeral sector following Funeral Markets Investigation Order 2021 and further guidance | Practical Law (thomsonreuters.com)
Contentious estates – beneficiary permitted to challenge solicitors’ costs for administering estate
In Kenig v Thomson Snell & Passmore LLP (2023 EWHC 181 SCCO), the High Court allowed a beneficiary of an estate to challenge the fees levied by the solicitors administering the estate. The solicitors’ costs (£54,410) had risen significantly from their original estimate (£10,000 to £15,000) but the executors had paid the bill and the beneficiary had approved the estate accounts. Despite this, the Costs Judge ordered a costs assessment finding there were special circumstances to justify it; including that the administration of the estate looked “relatively uncomplicated” and there may have been work which called for “little legal input and was administrative in nature – but which has been charged at substantial hourly rates and for lengthy periods“. The case is significant because it follows the Court of Appeal judgment in Tim Martin Interiors Ltd v Akin Gump LLP [2011] EWCA Civ 1574 which suggested that a third-party assessment of costs could only be brought in very limited circumstances; however, this decision was distinguished. It has been reported that the law firm involved has been granted permission to appeal. Beneficiary allowed to challenge firm’s fees after fourfold rise | News | Law Gazette; Order for costs assessment underlines fiduciary relationship between PR and beneficiary (High Court) | Practical Law (thomsonreuters.com)
Contentious estates – challenge to Will that passed estate along male line
In Kaur v Estate of Karnail Singh, 2023 EWHC 304 Fam, a widow successfully made a reasonable provision claim under the Inheritance (Provision for Family and Dependants) Act 1975 against her late husband’s estate. The Will left the estate in equal shares to the two male children of the marriage, leaving nothing to the widow or the female children. As recorded in the judgment, the widow made a full and equal contribution to the 66-year marriage and “the divorce cross check points unerringly towards an equal division of assets.” The widow’s income consisted of state benefits of about £12,000; her age and ill-health were also factors in the decision. The court ordered that the widow be granted half the net value of the £2-million estate and legal costs, with Mr Justice Peel commenting that “this is the clearest possible case entitling me to conclude that reasonable provision has not been made… It is hard to see how any other conclusion can be reached.” Kaur v Estate of Karnail Singh & Ors [2023] EWHC 304 (Fam) (14 February 2023) (bailii.org); Widow wins right to share of husband’s £1m-plus estate – BBC News
Mental capacity – new standards guidance for deputies
On 13 February, the Office of the Public Guardian (“OPG“) published a collection of deputy standards documents setting out what is expected of lay, public authority and professional court appointed deputies. The documents are said to form a central part of the OPG’s approach to supervising all three types of deputies. Topics covered in the standards document for professional deputies include: awareness of the Mental Capacity Act 2005, the Code of Practice and guidance published by OPG; best interest decision-making; and financial management and record-keeping. OPG Deputy Standards documents – GOV.UK
Estate administration – NAO report highlights problems with online probate service
The National Audit Office (“NAO“) has issued a report on the HM Courts & Tribunals Service (“HMCTS“) court reform programme. The programme was begun in 2016 with the aim of modernising the justice system. One of the projects undertaken was the introduction of an online probate service with this being rolled out in 2020. The NAO report is critical of many aspects of the programme’s delivery and, in relation to the online probate service, reports that there are inefficiencies with the service with many online probate cases being started online but later needing manual interventions by court staff because the service does not yet have the functionality to deal with all case types. This is so despite the online probate project being marked as “complete”. Also included in the report is that online probate services were passed from the development teams to the operational teams without a clear transfer of responsibility. Despite the need for improvements, the report comments that it isunclear whether HMCTS can deliver the programme’s outstanding work with the remaining funding. HMCTS have issued an initial response but will have said that a formal response to the report and its recommendations will be made in due course. Progress on the courts and tribunals reform programme – National Audit Office (NAO) press release; HMCTS response to National Audit Office report on Reform – GOV.UK (www.gov.uk)