When estates divide

Contentious executry work is growing. Why is this? Family dynamics are evolving, with “blended” families prevalent in today’s society. Property ownership is also commonplace, resulting in larger and more valuable estates. These factors, combined with an aging population, the rise in cross-border estates, the use of DIY wills, and a cost of living crisis, can add layers of complexity and emotion to the distribution of estates, with the potential for disputes.

Of course, disputes do not just occur between beneficiaries. Tensions among executors may need to be resolved, and issues can also arise as a result of lost or poorly drafted wills and unidentifiable beneficiaries.

Our dedicated Contentious Executry, Trusts and Tax team has experience in a plethora of executry disputes and associated actions. This article explores the most common.

Removal of executors and trustees

It is sometimes necessary to take steps to remove an executor from their position. This may be achieved administratively if an executor is willing to resign voluntarily, but if not, an interested party may ask the sheriff court or Court of Session to order their removal under s 23 of the Trusts (Scotland) Act 1921. This is only available in four limited circumstances, where the executor sought to be removed is:

1. insane;
2. incapable of acting by reason of physical or mental disability;
3. absent from the UK continuously for a period of at least six months; or has
4. disappeared for a period of at least six months.

It is up to the applicant to provide sufficient evidence to satisfy the court that removal is appropriate pursuant to one of these grounds. This can prove difficult, particularly in relation to grounds 1 and 2, when the applicant may not have access to medical records or other evidence in support of their case.

This option is unlikely to be helpful in the types of situations removal is normally desired, for example where an executor is refusing and/or delaying to carry out their duties, or there is deadlock between two or more executors.

The only other potential way to remove an executor (at present) is a petition to the Court of Session’s nobile officium. The court is only likely to grant removal if there has been serious malversation of office and it would prevent, prejudice or obstruct the execution of the executry were the executor to remain in office.

The Trusts and Succession (Scotland) Bill is currently making its way through the Scottish Parliament. Its provisions have been the subject of much debate, but once enacted this legislation is likely to extend the potential grounds for removal of executors.

Proving the tenor

There may be significant consequences if the principal will cannot be found after someone dies, particularly if there is a prior will in different terms, or the distribution under the laws of intestacy would differ. An action of proving the tenor can be brought, either in the sheriff court or the Court of Session, as a means of reviving the lost will with the same force and effect. The action can be raised by the executor(s) or a beneficiary under the lost will.

The 2022 case of RW v JW [2022] SC GLW 2 is a helpful reminder of what needs to be established, on the balance of probabilities, before an action to prove the tenor of a lost will can be successful:

1. the terms (or tenor) of the will;
2. the execution (i.e. signing) of the will; and
3. the circumstances of the loss.

Even if the tenor of a will is proven, this does not prevent a challenge to the validity of the will.

Challenging wills

There are a number of grounds of challenge to wills.

Lack of formal validity

A will may be challenged on the grounds it is invalid. In order for a will to be valid in Scotland it needs to be put in place by a person aged 12 or over (the testator), be in writing and be signed by the testator at the end of the last page. If not, the will is likely to lack formal validity and be open to challenge. The will should also be probative. This is achieved if it is signed on every page in the presence of an independent (adult) witness who has also signed the will on the last page. If the will is not probative, it will need to be set up by leading evidence in court proving that the will is valid and was signed by the testator, before confirmation will be granted.

Incapacity

A will is not valid if the deceased lacked the requisite capacity when it was signed. There is a presumption in favour of capacity and there are often evidential challenges in establishing that the testator was not capable of understanding the nature and consequences of what they were signing.

Facility and circumvention

Someone may suffer a degree of mental deterioration which, without amounting to incapacity, may leave them easily imposed on by others. Facility and circumvention may occur if someone takes advantage of this. Three requirements are necessary:

1. the testator had a weakened mental state (facility);
2. someone has taken advantage of this to their benefit (circumvention); and
3. the person challenging the will has suffered loss as a result.

Undue influence

Undue influence can occur if someone acting in a position of trust takes advantage of their position to secure a benefit under the will. A challenge to a will based on undue influence is very fact specific and rare in practice.

Fraud

If a will has been prepared fraudulently or has been forged, it may be challenged. For fraud, you must be able to prove that the testator was deceived into acting in a way they would not otherwise have acted.

Legal rights claims

A possible alternative to challenging a will is for a surviving spouse or child to insist on their legal rights. Regardless of the terms of a will, the children, spouse or civil partner of a person who dies domiciled in Scotland are entitled to legal rights, which are a fixed share of a person’s moveable estate. These rights are automatic (although they can be discharged both during life and after death), and executors have a duty to advise those having legal rights of their entitlement to the estate.

Claims can be brought against executors who have failed to pay legal rights timeously, and an executor’s duties in this regard should be borne in mind.

Professional negligence claims

A concern for those advising on the drafting of wills is that they may find themselves on the receiving end of professional negligence proceedings by disappointed beneficiaries. The duties owed by solicitors to third parties is a vexed topic, but the law has recognised that a duty of care can extend to a disappointed beneficiary in certain circumstances. Claims could arise if there has been undue delay in finalising drafting or implementing instructions and the client has died before this is done. These cases will all turn on their own facts and the test requires to be met that the act or omission was one no ordinarily competent solicitor acting in that field would make. Similarly, loss of testamentary writings might give rise to a negligence claim, although the position can usually be rectified with a proving the tenor action.

Lost legacies

What happens when a legatee cannot be identified when the estate comes to be distributed? This is often seen when a charity is not named correctly in the will. Who should receive the legacy?

The case of Brownrigg’s Executor (Vindex Trustees Ltd), Petitioner [2021] CSIH 46 is a good example. Estelle Brownrigg left a legacy to “Nelson Mandela Educational Fund, South Africa”, about which no information could be found on her death. However, a likely intended recipient could be found (the Nelson Mandela Children’s Fund). The executor petitioned the Inner House for directions as to the distribution of the legacy. While the court declined to make directions on the basis it “does not consider that it should adjudicate or give advice on the matter”, the court noted that counsel had advised that it seemed that the Nelson Mandela Children’s Fund was the intended beneficiary, and that if the executor was of the same opinion, counsel was of the view that the executor could proceed accordingly.

The court considered it was ultimately a question that fell to be resolved by “the exercise of the executor’s managerial discretion and good judgment”, but in making the distribution, the executor would be acting on the advice of counsel.

What about the situation where a charity was correctly named, but no longer exists when the legacy comes to be distributed, or has changed its identity or merged with another charity?

Often, wills contain a clause giving power and discretion to executors to distribute a legacy to a similar charity. If there is no such clause, thought needs to be given to whether the will indicates a general charitable intention. Much will turn not only on the facts and circumstances but also on the interpretation of the will and the testator’s intention. It is possible the legacy may become a “lost legacy” and fall to other beneficiaries, or into intestacy, or even to the Crown.

Avoiding and resolving contentious executry cases

Of course, the ideal situation is to avoid disputes arising in the first place, and clients should be encouraged to revisit their wills as circumstances and family dynamics change. If a dispute does arise, supporting clients to resolve matters between themselves, sometimes using formal alternative methods like mediation, can help settle disputes without the need for court action. There are, however, matters where court action is unavoidable, such as where it is necessary to prove the tenor.

A caveat can be an effective tool in executry disputes. Its purpose is to provide notice to the caveator if an application for (i) confirmation, (ii) the appointment of an executor or (iii) restriction of caution in respect of an executor, is made. It can give an interested party the opportunity to object to an application for confirmation and allow the dispute to be heard, and potentially resolved, at an early stage.