It is very rare for any dispute that finds its way to court to be resolved to the satisfaction of both parties; inevitably one party will feel aggrieved that their argument failed to find merit with the judge, even if they were not, strictly speaking, at fault. This was the case with a dispute over an updated will (the “2015 Will”) made by an elderly man, Jack Leonard, in which he extended his list of beneficiaries to include his stepchildren as well as his biological children.
As well as each of the latter receiving considerably less than they would have done under his previous will (the “2007 Will”), one son in particular, who had been financially dependent on his father for years, faced a potentially serious financial disadvantage. Although the judge in Leonard v Leonard did not believe that his desire to provide for his stepchildren was irrational or out of character, it was the manner in which the 2015 Will had been prepared, and his ability to understand the nature and consequences of the 2015 Will, that called into question his testamentary capacity.
Background to the case
Jack Leonard had been a successful businessman, having founded, and subsequently sold, a successful engineering company operating in both the UK and the US. He and his wife, Audrey, had four children, and the whole family had moved to the US in the early ‘70s. In 1980, Jack, Audrey and their two daughters returned to the UK, while their two older sons remained in the US. Audrey died in 1998, leaving £1.7m to her husband, in the expectation that any residue would pass to the children after Jack’s death. In 1999, Jack met and married Margaret, a widow with three children (one of whom died in 2005 leaving three children of their own) and they bought a house together in Essex. Jack saw a great deal of Margaret’s family and became very fond of them. Relations between his biological children and his stepchildren were cordial. Of Jack’s two sons who had remained in the US, Andrew had become financially reliant on his father after a serious accident in which he suffered traumatic head injuries. The other family member who also benefited from Jack’s generosity was Audrey’s sister, Marjorie, who lived, rent free, in a bungalow he’d bought in Sussex.
In the 2007 Will, among other provisions, Jack left his share in the Essex house and his chattels to Margaret, gave Andrew the option to buy his US house, and left the Sussex bungalow to Sara, his eldest daughter (on the understanding that she would ‘do the right thing’ by allowing Marjorie and her daughter, Susan, to stay for their respective lifetimes). The rest of his estate was to be divided equally between Margaret and his four biological children. In 2013 he began preparations to make a new will which, after several drafts, he eventually signed in October 2015. As was later revealed in court, the process of drafting the 2015 Will was not only tortuous but also complicated by clear signs of Jack’s gradual cognitive decline, which the court established had started before 2013.
What happened next
Jack died in 2019 leaving an estate valued at around £5.7m, which included properties in Sussex, Essex, France and the US. Other than the fact that Jack’s stepchildren and step-grandchildren were now beneficiaries (which they had not been under the 2007 Will) there were two specific anomalies that implied he was acting out of character when he signed the 2015 Will and which, his biological children alleged, pointed to a lack of testamentary capacity. The first was that there was no proper provision for Andrew because of the way in which the 2015 Will had been constructed; and neither was there any guarantee that his sister-in-law, Marjorie, would be able to continue living in the Sussex bungalow. Accordingly, Jack’s children from his first marriage (the claimants) went to court and invited it “to pronounce against a will signed by him in October 2015…and instead admit to probate an earlier will made in 2007”.
The legal test for testamentary capacity
The claimants advanced that the 2015 Will should be declared invalid either due to lack of testamentary capacity or because the testator (Jack) did not know and approve the contents of the 2015 Will. The judge, Mrs Justice Joanna Smith, used as her starting point the common law test for establishing testamentary capacity, originally outlined in 19th century case of Banks v Goodfellow, which requires the testator:
- To appreciate the nature and consequences of making a will
- To understand the extent of his / her property.
- To consider any moral claims on their estate.
- Not to be affected by any disorder of the mind or insane delusion.
Smith LJ dismissed the second and third limbs because the evidence suggested that Jack had a sufficiently ‘general idea’ of his assets to satisfy the test, and that he understood the claims to which he ought to give effect. However, she found that Jack did not understand the nature and effect of the 2015 Will, and neither did she consider that he would have made a will which “left Andrew’s future in an uncertain state had he not been suffering from a disorder of the mind (namely dementia).”
Disapplication of the Golden Rule
Having established that the first and fourth limbs of Banks v Goodfellow applied to this case, the judge concentrated on the unsatisfactory way in which Mrs Webb (a tax adviser rather than a lawyer, albeit employed by law firm, Irwin Mitchell) had approached the task of drawing up the 2015 Will; and on the actual contents of the 2015 Will which, she found, Jack struggled to comprehend.
The process of drafting the 2015 Will, the length of time it took, and the conduct of Mrs Webb during the process indicated that she had breached the ‘Golden Rule’. This requires a lawyer instructed by an elderly and / or vulnerable client to obtain a medical report in order to satisfy themselves that the individual in question has testamentary capacity to make a will, by reference to all limbs of ‘the Banks and Goodfellow test’. First, Mrs Webb had communicated largely by phone and email and did not see Jack face to face during the year preceding the signing of the 2015 Will, and thus did not see for herself whether or not Jack truly understood the provisions in the 2015 Will. Second, there were numerous errors and inconsistencies in the various drafts leading to the final version of the 2015 Will, some of which directly contradicted Jack’s wishes. Third, although the evidence showed that Jack wanted a simple will, the 2015 Will was anything but simple, incorporating complicated trust structures that Jack, due to his cognitive decline, clearly did not understand.
Disorder of the mind
The medical evidence confirmed that Jack had been experiencing mild to moderate “marked cognitive and motor slowing”, consistent with dementia, resulting in an impairment of his executive function, since at least 2013. The medical witnesses agreed that dementia does not necessarily equal a lack of testamentary capacity, but their disagreement over the extent to which Jack’s dementia affected his testamentary capacity cut no ice with Smith LJ who reiterated the point that it was for the court to determine testamentary capacity and not doctors.
She noted that, although Jack had been able to carry out a variety of administrative tasks and arrange domestic matters, the crucial evidence was provided by the trail of communication leading up to the signing of the 2015 Will, in which it was clear that Jack did not understand either the complex nature of the document, or what it was intended to do. This was most starkly demonstrated by the provisions relating to his son, Andrew, which had the potential to leave him financially high and dry, which was certainly never Jack’s intention. As Smith LJ noted, Jack’s dementia had “deprived him of the ability to understand the nature and effect of a number of the provisions in the 2015 Will” and, furthermore, had left him “unable to understand the potential for dispute” between his children and stepchildren.
Establish testamentary capacity before proceeding
Smith LJ concluded by pronouncing in favour of the 2007 Will and declaring the 2015 Will invalid. Smith LJ’s 124 page judgment is a very detailed, lucid, and provides a thorough clarification of the Banks v Goodfellow test used to establish testamentary capacity. It highlights the fact that mild to moderate dementia is a matter of degree and that its effect on an individual’s depth of understanding varies from person to person. That Jack was able to carry out certain functions competently but that he struggled with matters such as his will that required “complex attention”, meant that this case required painstaking analysis of all the evidence before the court. The judgment also emphasises the pivotal role the private client lawyer plays in ensuring that an elderly client has testamentary capacity before proceeding with will instructions.
As the population ages, and as family structures become more convoluted, situations like this are likely to become more commonplace which is why it is critical to ensure that the lawyer drafting a will is sufficiently experienced to approach it correctly. As the judge noted in her summing up “I consider it to be extremely regrettable that, knowing Jack’s affection for both sides of the family, the parties were unable to find a means of resolving this claim without a trial. Parties to cases of this sort should be under no illusions as to the emotional and financial toll they extract and the considerable ordeal for both sides of contesting the matter to a final judgment.” The court now has the power to order parties to engage in some form of alternative dispute resolution, most likely mediation in these types of cases, and we are expecting to see judges making orders early on in a case in a bid to encourage settlement between the parties, without the need for the court’s involvement.
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