Often the focus of our Inheritance Disputes team work is challenging the validity of a Will. Sometimes however all of the assets have been transferred from the deceased individual in the latter part of his/her life. In such circumstances, the content of any Will becomes largely irrelevant as there are no assets to distribute.
If, however, those ‘gifts’ made before death could be successfully challenged, the terms of any Will made would become relevant or, if no Will had been made, the assets recovered would be distributed in accordance with the statutory rules for distribution in intestate estates.
Keith Roberts and others v Paul Roberts (2020)
In Keith Roberts and others v Paul Roberts, District Judge Shorthose was presented with a case, the facts of which I suspect are not uncommon.
Mrs Joan Roberts had four children. In the latter part of her life she developed senile dementia and Alzheimer’s disease, which eventually lead to her death on 9th March 2013.
By July 2010, her condition had deteriorated to the point where she needed 24-hour care. Whilst the children sought to find an appropriate care home, Mrs Roberts moved in with the Defendant (Paul Roberts) and his wife initially on a temporary but which eventually turned out to be a more permanent basis, with periods of respite care sporadically over the three year period between moving in with the Defendant and Mrs Robert’s death. The Claimants (Keith Roberts and others) alleged that the Defendant sought to isolate Mrs Roberts and that they only got to see her when she was in respite care.
The main asset owned by Mrs Roberts was the family home. All of the siblings agreed that that property should be sold. As the property remained in Mrs Roberts’ deceased husband’s name, the Defendant obtained Letters of Administration and sold the property. Shortly after the sale of the property, the Defendant transferred almost the entirety of the sale proceeds into his own bank account. This was so notwithstanding the fact that he had no Power of Attorney enabling him to do so and there was no immediately apparent legal basis for him doing so. The Defendant claimed that these sums were gifted to him by the deceased. The Claimants disputed that, at the time that the property was sold and the transfers made, Mrs Roberts did not have mental capacity to make any gifts. In this regard, the Claimants had a favourable medical report in support of their position.
The Judge found that Mrs Roberts did make the gift to the Defendant but, most importantly for the Claimants, that she did not have the capacity to do so. This rendered the gift void and accordingly the Defendant was required to pay the sums received by him from the property sale back into the estate of Mrs Roberts so that the same could be distributed appropriately.
Previous case law
The Judge relied upon re Beaney [1978] 1 WLR 770 in reaching his conclusion. In that case, the deputy Judge (Martin Nourse QC as he then was) said:
“In the circumstances, it seems to me that the law is this. The degree or extent of understanding, required in respect of any instrument is relative to the particular transaction which it is to effect. In the case of a will the degree required is always high. In the case of a contract, a deed made for consideration or a gift inter vivos, whether by deed or otherwise, the degree required varies with the circumstances of the transaction. Thus, at one extreme, if the subject matter and value of a gift are trivial in relation to the donor’s other assets a low degree of understanding will suffice. But, at the other extreme, if its effect is to dispose of the donor’s only asset of value and thus, for practical purposes, to pre-empt the devolution of his estate under his will or on his intestacy, then the degree of understanding required is as high as that required for a will, and the donor must understand the claims of all potential donees and the extent of the property to be disposed of.”
This makes it clear that there is no ‘one size fits all’ level of capacity when considering whether a gift made inter-vivos is valid as a result of capacity or lack thereof. What is abundantly clear, however, is that, where the gift to be made is the main or sole asset of the person making the gift, the level of capacity required is the same as that required for a Will to be valid. Given this, in such circumstances, it would be sensible for solicitors instructed in respect of such transactions to follow the Golden Rule.
How Nelsons can help
Kevin Modiri is a Partner in our expert Inheritance Disputes team.
Should you have any queries relating to the facts that the Keith Roberts and others v Paul Roberts case relates to, a member of our specialist team would be delighted to speak to you. Please call us on 0800 024 1976 or contact us via our online form.