Weekly Round Up – 30 April 2021
A quick round of the latest news in the world of Wills, Lasting Powers of Attorney and Probate.
Family ‘trust’ issues
In Titcombe v Ison [2021], the High Court ruled that a secret trust of a valuable collection of jewellery, was not created in favour of the deceased’s niece.
Ms Richards had no children and so passed her estate to her friend, Mr Ison. She expressed her wishes that her niece (Mrs Titcombe) was to have some items of jewellery.
Consequently, Mrs Titcombe brought her case on the basis that Mr Ison had agreed to pass her aunt’s jewellery to her, and so held these on a bare, or secret trust, for her.
It was argued that, such a trust can be established formally, in writing (such as in Re Freud [2014]), or even if the trust terms have not been committed to writing in full or at all (as in Ottaway v Norman [1972]).
However, the court held that a secret trust had not been created in Mrs Titcombe’s favour as it was a mere moral obligation imposed on Mr Ison to pass the jewellery, but not enough to create a secret trust.
The court followed Kasperbauer v Griffiths [2000] where the Court of Appeal set the test as whether the testator intended a trust or ‘a mere moral or family obligation’.
The court also followed the House of Lords criterion in McCormick v Grogan [1867], where it asked whether the testator could have intended his express wishes to be the subject of a legal sanction if it were not followed.
More people now relying on inheritance
Inheritances are becoming an increasingly important source of income for future generations.
Research conducted by the Institute for Fiscal Studies (“IFS”) has highlighted that someone born in the 1980s can expect to get twice as much of their lifetime income from inheritance than someone born in the 1960s.
It is believed that with the younger generations failing to earn as much as their predecessors, and with all the media attention given to house prices, family inheritance is becoming more of a common trend.
The reliance of future inheritance has led to an expectation of such windfalls which is having a twofold societal impact.
Firstly, the IFS forecasts that people born in the 1980s will have £16,000 less saved at 45 years of age as they rely on inheritances, and not their income, to fund their retirement.
Secondly, a research conducted by the Kings Court Trust discovered that there is a rise in inheritance disputes.
With so many not leaving a valid Will, and so leaving many family members being excluded by the intestacy rules, this is an anticipated result of the expectation of inheritances.
Indeed, Paul Johnson, writing in The Times, stated that “reward for effort and talent is on the wane as the power of the brute luck of family wealth reasserts itself”.
Supreme Court rules that Robert Fleming gifted Oxfordshire Council land
Robert Fleming (grandfather of ‘007’ creator, Ian Fleming) donated some land to the Oxfordshire Council to be used for educational purposes through a statutory charitable trust.
The statute which provides the basis of this trust outlines that if the land later ceases to be used for that stated purpose, it reverts through a trust to the original owner, or their heirs.
Problems arose when the Oxfordshire Council closed the school in the Nettlebed parish to which the land was given.
The Oxfordshire Council’s intention was to open a larger school with improved facilities in a new location.
The Council sold the land to a property developer for £1.3 million, believing they owned the land outright.
Robert’s Fleming’s heirs then began proceedings, arguing that the land is no longer being used for stated educational purposes, and so should have reverted back to them. They now claimed the sale proceeds.
The case of Rittson-Thomas v Oxfordshire County Council [2021] was ruled in the Council’s favour.
The Supreme Court, in a landmark ruling, highlighted a section of the statute which provides that if the school needed new premises, the school’s trustees have the power to sell or exchange the donated land to allow them to move to a different site.
The Supreme Court accepted that, pragmatically, the pupils based at the old site needed to be moved away before the old site was sold, so the statute could not be construed as requiring the site to be sold before the school was moved.
The Supreme Court highlighted that whilst, nowadays, the judicial interpretation should lean towards continuing the charitable educational purposes set out in the statute, they emphasised the importance in drafting charitable gifts in Wills carefully.
There needs to be flexibility to cater for the charity’s changing purposes and needs.
