28 September 2022

Beware! Family dynamics and your Will

By Miranda Marshall, Director, Hayes + Storr.

Leo Tolstoy, the Russian author of Anna Karenina, 1828-1910 said: “All happy families are alike; each unhappy family is unhappy in its own way.”

The recent case of Ramus v Holt in the High Court held that a widow’s tense relationship with her daughter as trustee was not grounds for a reasonable provision claim. Here are some unhappy family dynamics.

The testator Christopher Ramus died by suicide in June 2020. He and his wife Elizabeth were in the process of selling the matrimonial home in preparation for their separation and divorce after a long marriage. Christopher had made his Will six years previously, although the year before he had made a codicil altering his chosen executors and trustees.

By his Will he placed most of his estate in a trust and gave Elizabeth a life interest only. The three trustees had the power to ‘advance’ (i.e., give) Elizabeth capital sums too on top of the income; but the trustees also had power to take away that income, which would have had the effect of disinheriting her.

The Letter of Wishes with the Will asked the Trustees they allow Elizabeth the income but not to pay her lump sum(s). She was only to lose the income if she did not need it, or remarried or cohabited. In my law school days this was still called a dum casta clause (Latin for ‘whilst chaste’ – those were different days!). Subject to her life interest, the trust fund was to be held on flexible discretionary trusts for Christopher’s children and grandchildren, and also for Elizabeth, unless the Trustees decided to exclude her from benefit.

Elizabeth’s issue was that her daughter Claire Holt was named as one of the trustees. The two women had had a difficult relationship in recent years, culminating in an argument that contributed to Elizabeth’s decision to divorce Christopher.

Elizabeth was very worried that the trustees had the absolute power to terminate the payment of income to her and refuse to pay her capital, so she commenced proceedings under the Inheritance (Provision for Family and Dependents) Act 1975.

She said that the difficulties she had previously with her daughter meant that the relationship was very ‘strained’. Elizabeth was also upset by an incident in which Claire had removed some of Christopher’s personal effects after his death, against the terms of the Will. Elizabeth suggested to the Court that the removal of Claire as trustee would be an appropriate resolution.

The judge decided that “reasonable financial provision from the estate of the deceased does not become unreasonable financial provision because of the identity of the trustees”. He said that Claire would not have the sole power to terminate the life interest; there would have to be unanimity of the trustees before they could do that. The judge said that he had no jurisdiction under the 1975 Act to remove a trustee and there was other law to do that.

The judge dismissed the case and said that ‘it is a wholly novel argument that reasonable financial provision had not been made, not because of the terms of the Will itself, but because a claimant objects to the identity of a trustee based on a personality clash’. The judge thought that such a clash would not of itself justify the removal of a trustee and that it was difficult to see how he could allow a successful claim that the Will had failed to make reasonable financial provision.

This case shows that it is critical that any trust in a Will is carefully crafted. If one is divorcing, or thinking of doing so, regular reviews of ones Will are needed. Thought must be given not just as to who gets what but also as to who does what. Perhaps here, the appointment of a professional and impartial trustee would have been prudent to ensure even-handedness. Choosing trustees who get on together and also have the ear and respect of the beneficiaries is critical.

For further information, please contact Miranda Marshall on 01263 712835 or email miranda.marshall@hayes-storr.com.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.