fbpx

Survivorship Clause Leads to Double Benefit for Beneficiaries

26th January 2017 By Arman Khosravi

There is an established legal principle that where people have wills benefiting each other (as is normal with the wills of a husband and wife) and the order in which they died cannot be ascertained, it is considered that the older of the two will have been the first to die.

It is also normal for a will to provide a ‘survivorship period’, so that if the second death closely follows the first, the terms of the will are varied. This can prevent tax and other complications which may arise through the administration of two related estates in rapid succession.

A recent case concerning an elderly couple who died dealt with the very unusual circumstance in which both of the above were in point. The dates of their deaths could not be determined and, in particular, it could not be ascertained which of them had died first. Their wills, which largely gave their estates to one another, both contained a 28-day survivorship clause.

Under the law, the husband, who was the younger of the two, was considered to have survived his wife, but could he be considered to have survived her by 28 days?

The court ruled that he could not, so her gift to him in her will did not take effect. However, the other bequests in their wills did take effect. Since the wills were virtually identical, this led to the unintended consequence that the beneficiaries under them benefited twice, despite this not being what the couple had intended when their wills were drafted.

In giving his decision, the judge indicated that, had the argument been that the will was misdrafted due to a clerical error, that would most likely have been successful and the will rectified. It remains to be seen if an appeal is made to advance that argument.

Source: Concious

Latest News

Award That Requires Borrowing Made Into Court Order

17th May, 2024 By

Disagreements between separating couples all too often result in litigation that substantially reduces the assets available to them, as was illustrated by a case that recently reached the High Court. At issue was whether awards made by arbitrators in financial remedy proceedings can be made into court orders even if that would require one of the parties to borrow money. The couple had previously had a relationship lasting a few years before resuming their relationship in 2015. They had two children before separating again in 2019. Following their separation, the...

Inheritance Disputes – Costs Risks Can Be Reduced

15th May, 2024 By

Arguments about what someone promised before their death can lead to significant legal costs. However, if faced with a claim against the estate, there may be steps the beneficiaries or executors can take to reduce the risks, as a recent High Court case illustrated. A man had left a farmhouse and agricultural land in Cornwall to his wife, with whom he had also jointly owned a neighbouring area of land. After his death, one of the couple's daughters and her husband claimed that he had told them he wanted them...

Share Rounding Error Does Not Prevent CGT Relief

13th May, 2024 By

There are often very specific rules that must be complied with in order to claim tax reliefs, but if a small mistake arises, the courts may be able to provide assistance. In a recent case, the First-tier Tribunal (FTT) found that an investor was entitled to Entrepreneurs' Relief on the disposal of his shares in a company, despite owning one share fewer than he needed to qualify for it. The investor had agreed to purchase 5 per cent of the shares in the company for £500,000. He wished to own...

Wife Entitled to Maintenance Until Sale of Family Home

10th May, 2024 By

When divorcing couples disagree on how assets should be divided, the courts will seek to arrive at a fair outcome for both parties. In deciding how the proceeds of sale of a former couple's home should be apportioned, the Family Court agreed with the wife that she should receive maintenance payments until the sale took place. The couple had married in 2006. Following a brief separation, they had reconciled for two years before finally separating in 2022. The husband and wife both contended that they should be entitled to about...