Succession: Variation by an attorney?

The Adults with Incapacity (Scotland) Act 2000 provides “general principles” governing how interventions under the Act, such as a decision by a continuing (and welfare) attorney on behalf of an adult, ought to be made. They require, among other things, that any intervention should be for the adult’s benefit, should be the least restrictive option available, and that
certain people are consulted as part of the process.These principles were discussed by Lord Sandison in Johnstone v Johnstone [2023] CSOH 30. The case raises a considerable number of questions, only some of which are discussed below.

In 2010, Elizabeth Kaye granted a continuing and welfare power of attorney in favour of her husband and Gordon Johnstone, either of whom failing Susan Foster. Her will appointed Johnstone and Foster as her executors and left the residue of her estate to her husband, whom failing her nieces and nephews.

Her husband’s will appointed the same executors and left the residue of his estate to Mrs Kaye, whom failing The Scar Free Foundation, a charity. He died in 2017, by which time Mrs Kaye had been diagnosed with dementia. She died in 2019.

Shortly before her death, having taken counsel’s opinion, her attorneys executed a deed of variation of Mr Kaye’s will, redirecting the bulk of his estate to the charity, Blind Veterans UK. They averred that they did so because Mrs Kaye did not wish the residue of Mr Kaye’s estate (some £2.45 million) to be subject to inheritance tax. For her nieces and nephews, the residue in which they were entitled to share was thereby reduced considerably in value.

Width of powers

The power of attorney was in relatively standard form. A wide, general power entitled the attorneys to do “everything regarding my estate which I could do for myself and that without limitation by reason of anything contained in this Power of Attorney or otherwise”, followed by, “without prejudice to these general powers”, specific powers including to “sign a deed of variation of any testamentary provision… in my favour”, for the benefit of persons including “any… charity… to whom I have been in the habit of making gifts”. Mrs Kaye had made donations totalling around £500 to Blind Veterans UK during the last 20 years of her life.

The pursuers, in reality the nieces and nephews, argued that the attorneys had to rely on the specific power, and in determining what was a “habit”, what mattered was the circumstances at the time the power of attorney was granted.

Lord Sandison decided that the general power allowed for deeds of variation in circumstances beyond those contemplated by the specific power. However he expressed the view, obiter, that Mrs Kaye’s past behaviour did constitute a habit for these purposes.

That point is not without difficulty. Mandates seem to be construed strictly and general mandates allow only ordinary acts of administration. If so, the general power, when coupled with the presumption against donation, would not appear to allow the attorneys to go so far as to implement a deed of variation.

“Benefit”; “least restrictive”

The attorneys argued that “benefit” for the purposes of the 2000 Act need not be pecuniary, and that taking steps to give effect to her averred wish benefitted Mrs Kaye. The report does not tell us what was adduced to support their position as to Mrs Kaye’s wish.

To achieve their aim, the attorneys had two options: a deed of variation or to alter Mrs Kaye’s will. The pursuers contended that the latter was the least restrictive option. It is not entirely clear why that might be, except perhaps that Mrs Kaye might have enjoyed Mr Kaye’s estate albeit she was independently wealthy. The Lord Ordinary, however, considered “there was no material difference in relation to her freedom between on the one hand transferring that residue by way of the deed of variation and, on the other, making a codicil to her will”.

There would, though, have been a procedural difference. A codicil would have required an intervention order, involving expense, which Mrs Kaye could afford, and delay, which it appears she was less able to bear. Seeking an intervention order in the first instance would have been a dangerous strategy. Further, the sheriff might well have ordered intimation to the nieces and nephews (it would not have mattered that some of them were not the “nearest relative”), allowing them perhaps to oppose the application.

It has never been clear whether someone intervening under the 2000 Act can make or alter testamentary provisions; however there is shrieval authority that it is possible in quite limited circumstances (see, for example T, Applicant 2005 SLT (Sh Ct) 97; G, Applicant 2009 SLT (Sh Ct) 122; and Ward, Appellant 2014 SLT (Sh Ct) 15). Lord Sandison went a step further, perhaps too far, in saying he did not see any reason, from the authorities cited, why an attorney might not, depending on their powers, sign a testamentary writing on behalf of an adult. That does not appear to be the law; however, the subject is a complex one. 

Whose views?

In making decisions, attorneys are to take into account the views of the adult and inter alios the nearest relative (note the singular), but in the latter case only where it is reasonable and practicable. Section 254 of the Mental Health (Care and Treatment) (Scotland) Act 2003 provides a list of potential nearest relatives in order of priority. The judgment does not note whether any of the three pursuing nieces and nephews was the nearest relative.

Since the attorneys’ obligation is only to take account of those views, acting contrary to them does not, of itself, render the attorneys liable to the nearest relative, nor render void any intervention made without consulting them. The attorneys had not sought the views of the nieces and nephews. They argued that the interests of the relatives in inheriting the combined estates were in conflict with those of Mrs Kaye such that it would have been unreasonable to consult them. Blind Veterans UK further suggested that having any regard to the relatives’ views might be a breach of the attorneys’ fiduciary duties.

The Lord Ordinary held that the views of relatives (note the plural) ought to have been taken into account; a factor such as clear estrangement or alienation, or incapacity or relevant vulnerability on the part of the relative, would be required to make obtaining those views unreasonable. While these are factors, they appear to relate only to the character of the nearest relative or their relationship with the adult. Reasonableness and practicability surely must also include things such as an attorney having to decide or act within a limited timescale or on a simple or day-to-day matter. Lord Sandison was not prepared to accept that any factor in this case (the tight timescale, or their “presumed antipathy”) rendered seeking the views of the relatives (again, note the plural) unreasonable, and accordingly found that the attorneys had failed to fulfil their fiduciary duties in not having consulted them.

Having rejected all but the last of the pursuers’ arguments, Lord Sandison, after stating that the attorneys’ error amounted to “a clear but practically inconsequential failure to comply with one of the general principles of the 2000 Act”, granted declarator that the deed of variation was entered into in breach of the attorneys’ duty to take account of the views of the nearest relatives, but refused the further declarator that they had acted beyond their powers and the conclusion for reduction of the deed.