Author: Giovanni Garcia

Creating a Family Trust? Are You Sure It Reflects Your True Intentions?

Posted on by Giovanni Garcia

Rather than giving money to your children directly, you may choose for a variety of good reasons to provide for them by way of a discretionary trust. Such a step is a serious matter, however, and as a High Court case underlined, it is extremely difficult to alter a trust deed after it has been formally executed.

The case concerned a father who wished to make provision for his three children from an inheritance of about £450,000 that he had received from his mother. He signed a deed that varied the terms of his mother’s will. As drafted, the deed placed all of his inheritance into a trust for the benefit of his children. The deed having been duly executed, he could neither cancel nor amend it.

The father launched proceedings seeking rectification of the deed on the basis that it did not reflect his true wishes. He said that his intention was that he and his wife would be included with their children as beneficiaries of the trust.

Ruling on the matter, the Court found that his instructions concerning the deed had not been correctly recorded. As a result, his name and that of his wife had been omitted from the list of beneficiaries. Regardless of where responsibility, if any, for that omission lay, the deed did not implement his intentions.

The Court found that the father wished to earmark £100,000 for the benefit of each of the three children and the remaining £150,000 for the benefit of himself and his wife. He wanted to create a discretionary trust so that the children’s access to funds would be controlled by trustees. One of the children was disabled and the trust was also designed to safeguard his access to state benefits. The Court exercised its discretion to rectify the deed so that it gave effect to those intentions.

If you require information on using or setting up a trust please contact Ingrid McCleave in our Wellers Wealth team at ingrid.mccleave@wellerslawgroup.com.

Sensible Divorcees Put Personal Animosity Aside – Court of Appeal Ruling

Posted on by Giovanni Garcia

Any good lawyer will tell you that it is far better for divorcing couples to agree how their assets should be divided, rather than fighting it out in court. A Court of Appeal case showed, however, that, where personal animosity persists, it is only too easy for the terms of such agreements to themselves become the subject of dispute.

The case concerned a very wealthy couple who, following highly acrimonious divorce proceedings, resolved to settle their differences. They signed a consent order which it was hoped would lead to a clean break. Amongst other things, the order required the husband to make a series of seven-figure lump sum payments to the wife. It also provided that the former matrimonial home should be sold ‘forthwith’ and the proceeds divided equally between them.

It was envisaged that an immediate sale of the property would be achieved at a price in excess of £7 million. In the event, however, the high-end property market stalled following the outcome of the 2016 Brexit referendum. The wife remained living in the house for about two and a half years before a buyer could be found. The eventual sale price was a disappointing £5.9 million.

Prior to the sale, the husband – who it was agreed was the property’s sole legal and beneficial owner – served a notice on the wife, requiring her to either vacate the house within four weeks or to pay £5,000 a week in rent. After she refused to take either of those courses, he launched possession proceedings against her. He also sought £600,000 in damages for alleged trespass.

Following a preliminary hearing, a judge found that the wife occupied the house as a mere gratuitous licensee and that the husband was entitled to give her reasonable notice to quit. On expiry of such notice, the wife became a trespasser liable to pay damages. Those rulings were, however, subsequently overturned after the wife appealed to a more senior judge.

Dismissing the husband’s challenge to that outcome, the Court noted that, when they signed the consent order, both husband and wife were confident that the desirable property would sell quickly. With no significant delay in the sale being envisaged, the order made no specific provision in relation to the wife’s occupation of the property pending sale.

Notwithstanding the order’s silence on that point, the Court found that, on its true interpretation, its meaning and effect was to permit the wife to occupy the property until the date of its sale. She was in the interim required to pay outgoings on the property, but was under no obligation to pay occupational rent.

Describing the case as a somewhat sorry cautionary tale, the Court noted that the proper interpretation of the consent order was, in the end, rather obvious. Personal animosity between the former couple had, however, driven them to make use of their considerable resources to litigate the matter through two appeals.

Interim Maintenance in Divorce Proceedings – Court of Appeal Gives Guidance

Posted on by Giovanni Garcia

Working out the financial consequences of divorce takes time and that is why judges have the power to make interim maintenance awards to bridge the gap. In an important ruling, the Court of Appeal gave guidance on how that power should be exercised to provide for reasonable financial support and relieve hardship.

The case concerned a couple in their 40s who separated after 10 years of marriage. Pending a full financial remedies hearing, the wife sought interim maintenance under Section 22 of the Matrimonial Causes Act 1973. A deputy district judge ordered the husband to pay her £2,850 a month. After the husband appealed, however, that order was overturned by a more senior judge.

In upholding the wife’s challenge to that outcome, the Court noted that the case raised an important point of principle. The power to award interim maintenance is an extremely valuable one in that it enables judges to meet the income needs of a spouse or children at a time when they might be in real need of financial support following separation and the commencement of proceedings.

Restoring the district judge’s order, the Court noted that there was nothing unusually complex about the wife’s application, which did not require extensive analysis. No further detail was required in the budget she put forward and the more senior judge had taken an overly restrictive approach to what constituted her immediate expenditure needs.

The district judge properly analysed the budgets submitted by each side and was entitled to conclude that the husband had sufficient resources to meet both their reasonable needs. As part of the interim award, she was also entitled to order the husband to pay the school fees of the younger of the family’s two children. Overall, she reached a fair decision as to what level of interim maintenance would be reasonable and the more senior judge had no proper basis for interfering with her decision.

Child Abduction – Runaway Mother Feels the Force of International Law

Posted on by Giovanni Garcia

Cross-border child abduction is an all too frequent result of broken relationships but it is also unspeakably cruel and English judges take their international treaty obligations to stamp it out very seriously. The High Court powerfully made that point in ordering the return of two young children to their homeland in Italy.

Although their parents met as students in the UK and owned property in this country, there was no dispute that the children were ordinarily resident in Italy. Following the breakdown of their parents’ relationship, their mother removed them to England in what the Court described as a blatant act of child abduction. Their father launched proceedings in England under the 1980 Hague Convention on the Civil Aspects of Child Abduction, seeking an order for their return to Italy.

Granting the order, the Court noted that child abduction is a particularly cruel, unpleasant and insidious form of abuse. The children had been the subject of extensive contact and custody proceedings in Italy and Italian judges had expressed concern about the mother’s attempts to alienate them from their father. As an interim protective measure following their abduction, an Italian court had awarded him exclusive and immediate custody of the children.

The Court rejected the mother’s plea that an enforced return to Italy would expose the children to an intolerable situation or grave risk of physical or psychological harm. The children’s objections to returning to Italy were rooted in the adverse and antipathetic image of the father that had been fostered by the mother. In short, there was an overwhelming case in favour of a return order being made.

The father had in good faith undertaken to pay for the mother’s one-way flight back to Italy and to cover her accommodation rent for three months. He also promised not to initiate or support any criminal proceedings being brought against her. However, the Court noted that it would have issued a return order even had those undertakings not been offered.

High Court Uncovers Blatant Forgery as Will Dispute Tears Family Apart

Posted on by Giovanni Garcia

If an elderly man had listened to his solicitor’s repeated advice to make a will, his children would have avoided a sea of trouble after his death. His failure to do so resulted in a bitter High Court dispute and a judge’s finding that one of his daughters resorted to forgery in a bid to inherit almost everything he owned.

Following his death, his daughter claimed to have discovered a photocopy of his will. The home-made document – the original of which was never found – purported to bequeath to her his home and all his other assets save for modest legacies to his grandchildren. Her brother and sister were specifically disinherited.

After the daughter sought to have the will admitted to probate, however, her siblings argued that it was a fabrication. During a nine-day trial, the Court heard evidence from the pensioner’s solicitor, who described him as a sweet and desperately lonely old man. He said that he had on numerous occasions sought to persuade his client to make a professionally drafted will but without success.

Ruling on the dispute, the Court was satisfied to the point of being sure that the will had been forged by the daughter in collaboration with her partner and the two witnesses who signed it. That meant that the pensioner had died without making a valid will and his estate would be divided equally between his three children.

The Court found that the terms of the will – which would have left his son homeless – were utterly incredible. The words used in the document were clearly not those of the pensioner but were redolent of the language used by the daughter.

The circumstances in which she claimed to have discovered the will were also highly suspicious and it was inherently unlikely that he would have made a will without using the services of the solicitor, to whom he would naturally have turned.

Making a Will? Appointing a Professional Executor Can Save Strife and Money

Posted on by Giovanni Garcia

The trouble with appointing loved ones as executors of your will is that they are likely to be grief-stricken and there can be no guarantee that they will get on. A High Court decision showed that appointing a professional to perform the task is often the best way to save money and preserve harmony.

The case concerned a businessman who sadly died at a young age. He had assets worth about £920,000, principally made up of three properties and his shares in a company he ran with his life partner. The partner and the deceased’s brother were appointed executors of the estate.

After the executors failed to see eye to eye, the brother launched proceedings on the basis that the partner had refused to participate in the process of obtaining a grant of probate. The partner denied that there had been any lack of cooperation on his part and eventually agreed that he and the brother should both step down as executors and be replaced by a legal professional.

The executors, however, both put forward candidates to fulfil that role and the Court was required to adjudicate between them. There was little between the candidates’ knowledge and experience and both were well qualified to perform the task. The Court, however, appointed the candidate preferred by the partner, principally on the basis that he would charge a lower hourly rate for his services in executing a will that contained no complicated or unusual provisions.

The Court expressed sympathy for the partner, who had suffered a devastating grief reaction to the businessman’s death. Although he had presented his case well and appropriately, he had used language in pre-trial correspondence which was at times intemperate. Due to such unreasonable conduct, he was ordered to pay the legal costs of the case on the punitive indemnity basis.