Stuart Maher, Director and Head of the Watson Ramsbottom Private Client Department looks at a case where a farmer’s will left almost all of his estate to a family discretionary trust.
The estate administration proceeded without problems. The beneficiaries of the trust were his widow and daughter and, at the time of his death in 2005, his estate was valued at £3.2 million.
The main asset in the estate was farmland, which had been farmed by him and a family farming partnership. This land has jumped in value after planning permission for residential development was granted over much of it, and a dispute has now arisen within the family over its ownership. The daughter is adamant that she owns it, it having been passed to her outside her father’s estate by succession as partner in the farming partnership. The widow, who has financial problems, claims that it was part of her husband’s assets which passed into the trust. She intimated that she intended to bring court proceedings to that effect and would seek to remove her daughter as her late husband’s executor and set aside the farming partnership agreement.
The widow indicated, however, that she could abandon her claims if reasonable financial provision were to be made for her from her late husband’s estate under the Inheritance (Provision for Family and Dependants) Act 1975. However, the right to bring a claim under the Act is time-limited to six months after probate is granted and thus expired more than a decade ago. She went to the High Court to request the right to bring a claim ‘out of time’, arguing that she did not understand the implications of the trust being a discretionary one, which can limit the income paid out to the beneficiaries.
The Court could not agree that she had not had the benefit of proper advice regarding the implications of the will when the estate administration was in progress. Her application was rejected.
Her only alternative in the circumstances seems to be to commence a litigation process against her family, which could be lengthy and expensive.
Stuart Maher, a Director and head of our private client department at Watson Ramsbottom comments “It is important that financial arrangements are made with full understanding of the possible consequences and, especially where an estate is being administered, for any issues to be dealt with promptly. The courts are naturally indisposed to allow such coals to be raked over years after everything should have been finalised.”
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