What’s wrong with Wills?
On 13 July 2017 the Law Commission launched “Making a Will”, a consultation to examine specific proposals for reform of the law of Wills and Succession.
I have read (or duly skimmed) the 284-page consultation document so that you, busy reader, don’t have to. What follows is a non-exhaustive description of the areas of the law under consideration.
LawCom identifies what it believes are three problems with the test in Banks v Goodfellow (1870) LR 5 QB 549:
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- It is unclear whether the 4th limb of the test (the testator must have suffered from no disorder of the mind or insane delusion) is a distinct requirement or merely a refinement of the 3rd limb (the testator must be able to understand the moral claims on his estate). While the language of Banks suggests the latter construction, in Sharp v Adam  EWCA Civ 449 the Court of Appeal preferred the former.
- The test does not reflect modern psychiatric approaches to mental capacity.
- The test is inconsistent with the Mental Capacity Act 2005, particularly because the latter creates a presumption of capacity whereas at common law the burden, at least initially, is on the person propounding a Will to prove its validity.
LawCom proposes legislative reversal of the decision in Re Walker  EWHC 71 (Ch) so that the Mental Capacity Act 2005 supplies the test for testamentary capacity. The alternative proposal is statutory codification of the Banks test, ironing out its uncertainties in the process.
LawCom considers some of the criticisms of the current law such as the difficulty of applying the “best interests” criteria to a Will, the impropriety of imposing a Will on someone who chose to remain intestate when they had capacity, the non-applicability of statutory Wills to foreign real estate and the duration and expense of the statutory Will-making process. LawCom concludes that there is no urgent need for reform in this area.
LawCom proposes a scheme to help people make Wills with professional support. It is suggested that the scheme would apply to testators who are capable of understanding what is necessary to make a Will but who need support in order to do so. It is uncertain whether any legislation would be needed to implement such a scheme.
LawCom considers the formal rules for executing Wills and invites comment on the following modifications:
- extension of 15 Wills Act 1837 (gifts to a witness or his spouse are void) to a witness’s cohabiting partner and family members;
- placing a person who signs a Will on a testator’s behalf (s. 9(b) Wills Act 1837) in the same position as a witness, to address the anomaly identified in Barrett v Bem  EWCA 52;
- abolition or clearer articulation of the specific requirement of attestation (as distinct from mere signing) by witnesses;
- introduction of a judicial power to dispense with the formal rules where it is clear that an invalid Will represents the testator’s wishes.
LawCom considers that electronic execution is an “intuitive next step” in the technology of Will making but notes that there is some doubt whether an electronic signature would comply with s. 9 Wills Act 1837, although the better view is that it would not: Lim v Thompson  EWHC 3341 (Ch).
LawCom proposes a new law to enable the Lord Chancellor to enact secondary legislation to validate electronic Wills (and perhaps also video Wills). LawCom envisages that new regulations would be enacted only when adequate security of electronic Wills (against fraud and undue influence) could be guaranteed.
Knowledge and approval and undue influence
LawCom identifies some overlap of the law of knowledge and approval with that of undue influence such that the former is often pleaded on facts which are more suggestive of the latter (either because people do not want to allege undue influence against family members or because there is a perception that undue influence is too difficult to prove).
LawCom proposes the following statutory reform:
- A rule of testamentary undue influence. This would be rebuttably presumed where there is (1) a relationship of influence and (2) a transaction calling for an explanation. Within that presumption, certain relationships (e.g. carer, solicitor but not family member) would be irrebuttably presumed to be influential. Whether a gift calls for an explanation would depend on the circumstances of the Will’s preparation and the beneficiary’s conduct in relation to that.
- As an alternative to the above, the court could be given a discretion to presume undue influence from all the circumstances.
- A restatement or clarification of the requirement for knowledge and approval, to mean only that the testator knows that he is making a Will, knows its terms and intends those terms to be incorporated in the Will. This definition would not require the Will to be a free exercise of testamentary decision-making – that being a question of undue influence rather than want of knowledge and approval.
LawCom points out that unfairness or difficulty can arise where a child dies intestate: for example, half their property may pass to an absent, irresponsible parent or their wishes for disposal of their body may be frustrated by a parent acting as administrator. LawCom proposes that the minimum age of capacity for making a Will be lowered to 16 and invites discussion on whether the court should have power to authorise Wills for minors.
Interpretation and rectification
LawCom invites comment on the obsolescence or otherwise of ss. 23-31 Wills Act 1837 (rules of interpretation) and proposes that ss. 30-31 be repealed. It invites comment on whether there is a need for any new rules of interpretation of Wills.
LawCom considers s. 21 Administration of Justice Act 1982 and the scope of the court’s power to rectify Wills but concludes (rather surprisingly) that widening the scope of the statutory power is undesirable because it may obviate the need to sue a negligent Will draftsman (it is not clear why this would be undesirable) or may present an opportunity for posthumous estate planning (in this context there is no acknowledgement of the fact that equitable rectification of unilateral inter vivos instruments is rarely available to correct mistakes as to fiscal consequences).
- a provision mirroring sch. 2, para 8 Mental Capacity Act 2005 to prevent ademption resulting from a disposal of property by the donee of a lasting power of attorney, provided that the donor has lost testamentary capacity at the time of the disposal and so cannot change his Will (but would the proviso also apply to deputies hereafter?);
- no ademption (i.e. tracing into proceeds of sale) where the subject matter of a gift is the subject of an incomplete sale or option agreement at time of death;
- no ademption of a gift of shares to result from internal dealings of the company;
- “compensation” for a legatee in the form of cash from residue where a gift of property is destroyed at the same time as the testator’s death.
The reasons for the proposals are fairly self-explanatory. They build on the principle that gifts should not adeem where the testator has had no opportunity or may not have realised the need to alter his Will. That said, it is doubtful whether the final proposal would truly effect the testator’s wishes in cases where a very valuable chattel is destroyed and the legatee receives “compensation” which wipes out the residuary gift.
LawCom invites us to consider whether Wills should continue to be revoked automatically by marriage and (if so) whether (1) a testator should be able to exclude the rule in their Will and/or (2) an exception should be made for people who marry when they lack testamentary capacity.
LawCom rejects any reform of the common law doctrine of mutual Wills but proposes that the definition of “net estate” in the Inheritance (Provision for Family and Dependants) Act 1975 be extended to property held on constructive trusts pursuant to a mutual Wills agreement.
Donatio mortis causa
LawCom makes no specific proposals regarding this anomalous doctrine (other than rejecting any statutory codification of it) and invites comment on whether it should be abolished or retained. King v Dubrey  EWCA Civ 581 is considered to be a clear statement of how the rule operates.
Other possible functions of a Will
LawCom considers how a Will may regulate
- digital assets, but rejects any attempt to amend the law of Wills to deal with them because the rights in question are more commonly contractual or IP rights than strict property rights;
- disposal of bodies, but concludes that there should be no law that the deceased’s wishes in this regard are binding until the law on how bodies may be disposed of has itself been reviewed;
- guardianship, identifying a discrepancy between the statutory requirement to date a guardianship appointment (s. 5 Children Act 1989) and the absence of any requirement to date a will (by which a guardianship appointment is often made) but concluding that, as Wills are commonly dated, there is no practical need for reform.
The consultation runs until 10 November 2017 should you wish to take part. More information can be found at www.lawcom.gov.uk/project/wills/.
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