LLB Succession WGS Failure (1)

8/2/2019 LLB Succession WGS Failure (1)

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LLB Succession

Failure of Gifts by Will


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Failure of gifts

Even if a will is valid, individual gifts in it may fail there are several reasons for

this:

1. Beneficiary (B) disclaims

2. B predeceases T (lapse)

3. A specific gift adeems

4. B /spouse witness the will

5. Gift to a spouse fails due to divorce / annulment

6. By reason of public policy or because it promotes an illegal purpose (e.g.

forfeiture)

7. Uncertainty

8. The gift is contingent on a condition which is not satisfied

9. The gift was made as a result of fraud on T

Some can also apply on intestacy e.g. disclaimer, forfeiture or lapse


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1. Disclaimer

If you do not want a gift in a will or on an intestacy you can

disclaim it. Why do this?

1. The gift brings obligations B does not want to fulfil

2. Personal unwillingness to accept Ts gift 3. Tax savings

Note you can accept by conduct Re Hodge 1940

BUT you cannot accept part of a gift and disclaim the rest

where the gift is a single gift Although if there are 2 separate legacies you can keep one

and disclaim the other

A disclaimer can be retracted provided no one has altered

their position as a result of the disclaimer


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2. Lapse

A gift fails if B predeceases T this is because

a will is of no effect until T dies

The gift will then fall into the residue

It will apply to gifts to companies that cease to

exist before Ts death but NOT charities the

cy-pres rule

Lapse cannot be excluded by a provision in the

will although T can make a substitutional gift

There are certain exceptions


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Exceptions to lapse

Lapse does not apply where there is a gift to joint tenants

the gift passes automatically to the other JT (s) by survivorship

(lapse does apply to tenants in common)

It does not apply to a class gift the subject matter is dividedup between the other members of the class

SO joint tenants and class gifts will ONLY lapse when all JTs /

members of the class predecease T

This is why wills have clauses like to such of my children asshall survive me (the class gift) and if more than one in equal

shares (ensures the gift is as tenants in common)

Gifts to issue lapse here is altered by s33 Wills Act 1837


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S33 Wills Act 1837 (as amended)

Provides a sort of statutory substitutional

clause

BUT it only applies where the original gift is to

the Ts ISSUE (i.e. child or remoter lineal

descendants)

So do NOT apply it between siblings, nephews,

nieces etc

Logic is that it is preferable for the gift to stay

in Bs family rather than go into residue


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The section applies where:

1. A will contains a gift to the child or remoter

issue(i.e. grandchild, great-grandchild etc) of T

AND

2. the intended beneficiary dies before T,

leaving issue AND

3. issue of the intended beneficiary are living

(and this includes en ventre sa mere) at the Ts

death


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If these conditions are met

In the absence of a contrary intention shown by the will

The gift takes effect as a gift to such issue

Who take (on a per stirpes basis i.e. in equal shares if more

than one) the gift their parent would have taken It also applies (in the absence of a contrary intention) to a

class gift to Ts children or remoter issue

But note it will NOT prevent failure of gifts in favour of

beneficiaries who predecease but are not issue of T AND it will not apply on a gift to such of my children as

survive me


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Shares under s33 are taken per

stirpes

This means the benefit is not divided

according to the number of persons who will

take a benefit

Instead it is divided up according to the

number of branches of the family

The children take the share their deceased

parent would have taken


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See Ling v Ling 2002

Here there was a gift to the children of A who attain

21 and who are living 1 month after As death

X, a child of A, predeceased, leaving a son, X who

was not yet 21 Held: S 33 applied and there was no contrary

intention (you seem to need a more express

provision) SO X got the gift but it was contingent on

him reaching 21 he got the share his parent would

have taken


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Example

Jordan has four children, Merlot, Shiraz, Princess and

Tiger and her simple will leaves everything to the

four of them in equal shares

Merlot has died leaving 2 children, India and Alaska Shiraz has also died along with her daughter

Chardonnay BUT Chardonnay left triplets, Randy,

Rudi and Rocky

Princess and Tiger are still alive when Jordan dies

Section 33 applies but how much will they all get?


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Commorientes

Usually there is no problem in determining who died first T

or beneficiary- and so whether the gift lapsed

BUT what if they die together in circumstances where the

order of death is uncertain?

Usually medical evidence can help but not always plane

crashes etc

Unless the will provides that B must survive T for a certain

period (28 days is common and is likely to be in any

professionally drawn will) the commorientes rule will apply

Note s184 does not apply on intestacy for SPOUSES and CIVIL

PARTNERS the law implies a 28 day survivorship period


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Law of Property Act 1925 s 184

the commorientes rule Where there is NO EVIDENCE as to the order in which deaths have

occurred then for succession purposes.

The YOUNGER is deemed to have survived the elder

SO a gift in the younger persons will to the elder would lapse but NOT

vice versa It applies both where there is a will and where there isnt (so the estate is

distributed under the intestacy rules) subject to the spouse / civil partner

point mentioned previously

It will NOT apply where there is proof of survivorship then the estates

are distributed accordingly For the presumption to apply the proof must be enough to render it

UNCERTAIN who survived whom

What degree of proof is necessary?


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Key case on What does uncertain

mean?+ Hickman v Peacey 1945 AC 304

5 people were killed when a bomb fell on their house during

the Battle of Britain. The house was completely ruined and all

inside were killed and buried under the debris. Two of the

people killed had made wills benefiting each other and some

of the others

The Court of Appeal held that s184 did not apply . The House

of Lords reversed this BUT by a 3 to 2 majority- saying s184

applied since it could not be proved that any one person hadsurvived the other

BUTlots of interesting comments in the judgments


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The House of Lords decision!

Held 3 to 2 that s184 applied

Lord Macmillan- view is that if it cannot be ascertained which person

survived, the section applied. One reason why it cannot be ascertained

may be that the deaths occurred so closely that there is a high probability

that they were practically instantaneous

It is possible that the deaths may be at exactly the same time BUT the real

question is can you say for certain who died first? If the answer to this is

No then s184 applies

Lord Macmillan appeared to want proof beyond all reasonable doubt

Lord Simon in his dissenting judgment favoured a lesser degree of proofevidence leading to a defined and warranted conclusion

The case is worth a look in full


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Note also

The persons do not have to die together in the same accident / event

E.g. one is lost at sea on an unspecifiable date whilst the other dies in hospital in

the UK

Obviously this can be rebutted by evidence e.g. someone saw the now dead

sailor alive at a time when his younger UK based friend was dead survivorship

may be found on the balance of probabilities

Lamb v Lord Advocate 1976 burden of proof is the balance of probabilities

Here couple died together in a house fire. There was some evidence that the wife

had got out of the home and then gone back in to try to rescue H who was older,

had been gassed in World War One and was in poorer healthview was he would

have died first. Held the section only applies where the order of deaths is uncertain and the

court must first be satisfied of this. SO if on the balance of probabilities the actual

order of death emerges the court will give effect to that without resorting to s184


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See also

Re Rowland 1963 Ch

T and W drowned when their small boat sank in the

Pacific between 10 and 18 July. T left his estate to W

unless W predeceased or their death coincided Held: coincided meant at the same time. It was

uncertain whether she survived or not so s 184

applied

Moral here is take care when drafting survivorship

provisions!


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3. A specific gift adeems

A specific gift fails through ademption if the

subject matter of the gift ceases to be a part

of Ts estate by the date of Ts death

See your notes on legacies


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4. Revision Section 15 Wills Act

Beneficiary will lose his gift under the will if he or hisspouse has witnessed the will

This does not affect the validity of the will

Beneficiary will not lose his gift if ignoring his signature the

will is still validly executede.g. Will dated 23 Oct 2010

Gift of 100 to Fred Bloggs

Rest to John Smith

Signed testator

Witnessed Fred Bloggs

Michael Jones

Doris Jones


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Section 15 also applies to:

Class gifts the benefit is lost and goes to the

others in the class

A gift to joint tenants the benefit goes to the

other JTs

A gift as tenants in common benefit falls into

residue OR if it is a gift of residue will pass as

on intestacy


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Section 15 does NOT apply to

A witness who becomes a beneficiary after Tsdeath

A witness who marries a beneficiary after

attestation of the will To privileged wills no witnesses needed

To a beneficiary under a secret trust

To gifts made or confirmed by another will orcodicil which the beneficiary /spouse did notwitness


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Professional Executors

It is common practice for a solicitor to beappointed as an executor in a will

The will must also contain a charging clause toallow the solicitor to be paid for work done (toovercome rule that a trustee cannot profit fromthe trust overcome by Ts acceptance of thecharge)

This clause is classed as benefit and is caught by

s.15 So a solicitor / executor should not witness the

will


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5. Gift to a spouse fails due to

divorce or annulment

See earlier notes on revocation

-s18 A Wills Act 1837 removes a spouse / civil

partner from entitlement under Ts will / the

intestacy rules

AND as an executor of Ts will

AND if a Clean Break divorce / dissolution - the

final property order between the couple can

bar out Family Provision applications


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6. Public Policy reasons

The will promotes an illegal purpose

Most common reason is forfeiture


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Forfeiture the basic rule

This is a common law rule of public policy whereby a person whounlawfully kills another cannot benefit from that persons will or intestacy(and also applies to nominated property, trusts, joint tenancy and theproceeds of any insurance policy)

SO a gift to the killer falls into residue- if it is a gift of residue (or there is

no residuary gift) it will pass as on intestacy BUT with the killer disqualified from taking under the intestacy rules the

property passes to other members of the same class and if there are none,then on to the next class entitled under the rules

If killer and victim were beneficial joint tenants the killing automaticallysevers the joint tenancy, creating a tenancy in common and the victimsshare is then dealt with as above

Re Crippen 1911 P 108

H murdered Wife was convicted and hanged. Held: His estate could notbenefit


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What about manslaughter?

The cases are inconsistent as to whether the forfeiture rule applies. There is a view

(expressed in In the Estate of Hall 1914) that the application of the forfeiture rule

does not depend on the moral guilt of the killer and so there should be no

distinction between murder and manslaughter on the grounds on moral

culpability.

It WILL apply: 1. if it is manslaughter by diminished responsibility

Re Giles 1972 Ch 544

Re Royse 1984 3 All ER 339

Jones v Roberts 1995 2 FLR 422 the rejected argument here was based on the cases in

no 2. belowLand v Land 2006 see WGS materials

2. if it is manslaughter from deliberate, intentional and unlawful violence

Grey v Barr 1971 2QB 554

Re H 1990 1 FLR 441


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Forfeiture does not apply

Where the killer is found not guilty of murder

or manslaughter by reason of insanity

Re Houghton 1915 2 Ch 173 a man found

not guilty of killing his father and brother due

to insanity was entitled to claim under fathers

intestacy

There is a view that it should not apply in

motor manslaughter cases


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Is a conviction needed?

No such an approach could cause difficulties

These are many cases each year where X murders Y and then

kills themself (and so cannot be convicted) quite often they

are married / civil partners so there are property issues

Would it be right for the forfeiture rule NOT to apply, thus

allowing the killers estate to benefit?

Re Dellows WT 1964 1 All ER

H and W found dead in a gas filled room. S 184 applied so W,

who was younger, was presumed to survive H. BUT evidence

strong that she had killed her helpless, stroke ridden husband

and had committed suicide in the process . Held her estate

could not benefit under Hs will


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Effect of forfeiture

A gift in victims will to the killer falls into residue

If it is a gift of residue the property passes as on intestacy but

with the killer disqualified from taking

The killer cannot take under the intestacy of the person they

have killed

The property will pass to other members of the same class OR

if none, then to the next class entitled on intestacy

What if the killer and victim were beneficial joint tenants?

There is automatic severance, thus creating a tenancy in

common. The killer cannot benefit through survivorship.


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The Forfeiture Act 1982

This gives the court discretion to modify the

application of the forfeiture rule in cases of unlawful

killing (except where killer is convicted of murder)

Section 2 where the court determines that theforfeiture rule precludes the offender from acquiring

an interest it may make an order modifying the effect

of the rule

The court must have regard to the conduct of the

offender and of the deceased and to all the relevant

circumstances


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Note also.

There is a time limit for an application 3 months from conviction. This

will presumably not prevent modification if there is no conviction e.g.

because the killer committed suicide before the trial.

See Land v Land on this point 4 days out of time no discretion

BUT S 3 forfeiture rule does NOT preclude applications for FamilyProvision

Land v Land again on this point

NB - Forfeiture Act 1982 S 5 the Act does not apply in the case of a

person who stands convicted of murder

The Act only applies if the court thinks the forfeiture rule applies. In Re Hthe court found the Act did NOT apply but added that if they had thought

it applied they would have granted relief under S2

There are lots of cases and articles on this area


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Key cases

Re Kay 1985 2 All ER 833

Dunbar v Plant 1998 Ch 412

Re DWS (deceased) 2001 Ch 568 CA not a popular decision

and Kerridge thinks it was wrong. He feels the Court of

Appeals approach of construing the will (or intestacy) is

misconceived and they should operate the forfeiture rule by

way of a constructive trust i.e. guess what T/the intestate

would have wanted in this situation

BUT note this case triggered a change in the law see later

Dalton v Latham 2003 All ER (D) 305


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Law Commission Consultation

Paper 172 on the Forfeiture Rule Examined what should happen to the inheritance where the

dead person has died intestate and the potential heir is

excluded because they killed the dead person

Meant the killers children lost out on an inheritance because

of their parents wrong doing

View was that where heir disqualified property should be

distributed as though that person had died

This would better reflect the likely wishes of D

AND ensure that grandchildren would be allowed into the

scheme of inheritance

Re DWS triggered this as the decision in that case was seen as

being unfairresulted in.


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Estates of Deceased Persons(Forfeiture Rule and

Law of Succession ) Act 2011

In force February 2012

Provides that a person who forfeits or

disclaims an entitlement on death will be

treated as having predeceased.

This allows their issue to replace them on

intestacy OR allows a substitutional provision

in a will to take effect

The Act can be varied or excluded by will


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Example

Jim kills his widowed mother Lucy, who dies intestate. He has

two children. Lucys only other relative is her sister Mary

Old rule was that their father had not predeceased and so

the children had no rights under the statutory trusts. This

means Mary takes the estate even though Lucy would havepreferred it to go to her grandchildren.

New law Jim is treated as predeceasing Lucy so the two

children take equally pre stirpes under the statutory trusts


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Illegitimate children

The Act allows illegitimate issue of a child who survives an

intestate but who dies without attaining a vested interest to

replace them

Example: Widowed Jessie wins 50 million on the Euro Lottery

and dies from a heart attack with the shock, intestate. Herdaughter Adele goes into labour due to the stress and dies in

childbirth, aged 16 leaving an illegitimate son, Kyle.

Under the new law baby Kyle can inherit under the statutory

trusts

Under the old law he would be entitled to nothing as his

mother did not predecease the intestate


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7. Uncertainty

A gift will be void if it is uncertain EITHER

1. as to its subject matter OR

2. as to its object (beneficiary)

The court will lean towards construing a gift as

being certain and will admit evidence where

there is an ambiguity


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Uncertainty of subject matter

Peck v Halsey 1726gift of some of my best linen

voidhow much was some and what was best

Re Golay 1965 - a reasonable income was not void

- as assessing what was reasonable was an objectivetest that the court was used to

Jubber v Jubber 1839 a handsome gratuity was

held void

BUT in Talbot v Talbot 1968 an option given by will

to purchase a farm at a reasonable valuation was

held not to be void for uncertainty


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Uncertainty of objects

Re Stephenson 1897T left residue to the

children of the deceased son Bamber of my

fathers sister. The sister had 3 sons called

Bamber and each had several children.Evidence did not help to determine which Mr

Bamber T meant so the gift failed

Note this rule is unlikely to apply to charitablegifts see your Equity notes!


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What happens on Failure?

The subject matter of a failed gift will EITHER fall into the

residue of the estate OR pass to the person T has specified as

the substitutional beneficiary if there is one

If it is a failed gift of residue (i.e. there is no substitutional gift)

OR there is no residuary beneficiary the property will pass ason intestacy this is called a partial intestacy

Class gifts failed share passes to other members of the class

If a life interest fails the interest in remainder is accelerated

LLB Succession WGS Failure (1)

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