Reduce the chance of a successful claim against your estate

Paul Rothwell, Wills and Probate Solicitor in our Gravesend based Wills and Probate department comments on the recent case of Nahajec v Fowle.

Recently there have been a couple of cases heard in court about estranged children successfully making claims against their deceased parent’s estate. This has attracted media attention and continues to be an area of concern for clients and their lawyers advising them.

The case of Nahajec v Fowle was about a deceased father who prepared a will omitting his three adult children who, through his own choice, he was estranged from. By will, the deceased left his estate to a friend who had cared for him in the final years of his life. The deceased also prepared a separate letter giving details about why he made no provision for his children.

Two of the deceased’s three children made claims against their father’s estate. One child’s claim was settled out of court, but the other child’s case was heard in court. The court awarded a lump sum to the deceased’s daughter, despite his efforts to make sure she did not inherit.

The court in coming to this decision looked at a number of factors, but part of the judgement focused on the accuracy of the note the deceased left his executor, amongst other things.

A carefully prepared will provides you with the freedom to direct how you would like your estate distributed on death. However, in situations where a third party is seeking to claim against your estate the court will need to establish all the facts and look at all the evidence available before a decision an be made.  Perhaps in this case, if the letter the deceased prepared setting out the reasons for excluding his children was more accurate, the outcome of the case might have been different.

Given that a couple of cases like this have been heard in the court in recent years, the judgements have been scrutinised by many will and probate lawyers, so they can advise their clients about how to prevent future claims being made against their estate at the point of preparing a will for them.

I think the lessons learnt from the most recent court judgement, if you plan to exclude any of your adult children from inheriting your estate are:-

• Prepare a note of why you are specifically excluding your children from your estate;
• Set out details in a timeline to record the history of your relationship with your children;
• Make sure any note or timeline you leave accurately records the facts;
• Keep the note and timeline you prepare up to date; and
• Continue to take advice on your will and situation, in case further cases are heard at court to make sure the documents your prepare specifically deal with items discussed in future judgements.

If you are appointed as an executor, it is important to take advice before administering an estate, where there is a risk a claim may be made against it.

In Nahajec v Fowle the executor was also the beneficiary and he had already distributed the estate before the lump sum was awarded by the court. The executor had used money he had inherited to pay off debts, as well as spend some of the capital inherited on other items, so he may have had to borrow money to pay the amount awarded by the court. 

This situation could have been worse had the executor not been a beneficiary as well, because if the estate had been distributed before the lump sum was awarded, he may have had to recover money from the beneficiaries.  Ultimately, if the executor could not do this then he may have been personally liable to meet the cost of the claim from his own pocket.

If you are appointed as an executor, it may be appropriate to do one or more of the following to protect yourself: -

• Wait six months from the date the court issues a grant of probate before distributing the estate;
• Arrange for beneficiaries to sign an indemnity to confirm they will compensate you as executor of the estate if a successful claim is made in the future; and
• Consider if an insurance policy to cover this risk of future claims might be available.

This judge emphasised decisions in cases like this are case specific. It is often beneficial to build a relationship with the firm who prepares your will for you, so the firm can keep a detailed background of your circumstances, so on death all the facts are readily available should a claim be made against the estate.

To seek further advice on your specific circumstances, speak to our New Enquiries Team on 01474 546013 to arrange your no obligation, 45 minute fixed-price legal advice consultation with one of our Wills and Probate experts for just £99 inc. VAT.