Happy New Year - our first newsletter of 2021! Throughout this year we will continue to bring you news and developments relating to the charities sector.
Generally speaking, anyone who is under 18 cannot make a will. The one exception is if that person is a member of the Armed Forces where separate rules apply.
The recent case of CJF has highlighted another situation where it may be possible to make "a will". In this particular set of circumstances, the will took the format of a settlement/trust document.
CJF had been born in 2005 and suffered severe neurological disabilities following complications at birth. A successful clinical negligence claim was made resulting in a lump sum damages award.
CJF’s father denied paternity and played no part in his life. His mother had looked after him during his early years but he was subsequently taken into foster care partly owing to the permanent damage to his mother's health because of the complicated birth.
A property was purchased and adapted for CJF’s needs following the settlement in which C JF and his foster carers and their two daughters lived.
CJF became terminally ill whilst still under the age of 18. The intestacy provisions would mean that his estate, which included the property valued at about £350,000, together with a further £310,000 would pass equally between his mother and his father. Nothing would pass to the foster carers who had very limited personal means themselves, meaning they would be unable to purchase the property from the estate.
An emergency application was made to the court who authorised the creation of a settlement enabling the foster family to keep the property, outright and free of tax, with the inheritance tax coming out of residue and the balance then passing to CJF’s mother.
The order does not set out the terms of the settlement but, presumably, there were no inheritance tax capital gains tax implications of creation of the settlement, taking advantage of the disabled trust regime.
Whilst an IPFDA claim might have been possible in the case, it was clearly preferable to resolve everything before CJF passed away, for a quicker and less stressful solution for all concerned.
The case provides an example of a flexible approach by the Court of Protection to a complex set of circumstances which could otherwise have resulted in particular unfairness. It is reminiscent of the earlier case of Bouette v Rose where a mother had to make a claim, following the death of her minor daughter who had received a damages award, under the Inheritance (Provision for Family and Dependants) Act 1975 to be entitled to the whole of the estate as she had had the sole carer of her daughter during her lifetime – the father having been absent for most of the child's life. The father was entitled to a one half share under the intestacy rules.
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