Where there’s a will there’s a way. Well more than one actually – but are they worth the hassle?
In recent articles I have relayed the virtues of a properly executed will when disposing of a person’s estate as a way that is safe to all but the most sophisticated of frauds.
As practitioners, however, we get enough random calls and enquiries from potential customers to know that life seldom fits into neat and tidy boxes. What happens if the maker of a will arranges with the executors to ensure that, after their death, a gift is made to someone not included in their will? This is known as a ‘fully secret trust’. For this to be valid, it must be proven that the will maker intended the gift to be made to a certain person and that, sometime between writing the will and their death, this wish was passed on to the executors of the estate, and that these executors accept their obligations.
There is also what is known as a ‘half-secret trust’. Here the beneficiary is stated in the will as holding the estate as a trustee only, but the terms of the trust gift are not detailed. The other elements are the same as a fully secret trust, but with the exception that the communication to the beneficiary must be made before the will is formally made (the process known as “execution” of the will).
The downside of secret trusts, particularly in regards to the fully secret trust, is the invariably small amount of evidence which is available relating to their very existence, let alone any specific terms.
Alternative ways of passing property are potentially available without the formalities (or safeguards, depending on your point of view) of a properly constituted will, or those provided by Acts of Parliament.
One such way is ‘donatio mortis causa’. When someone contemplates their impending death, then makes a gift which will only take effect when their death has occurred, and then hands over the means to possession or ownership of the gift to the recipient (such as a key or a deed of title), this is known as a donatio mortis causa or, in translation, a gift anticipating death. This is also known as a deathbed gift.
We previously published an article regarding proprietary estoppel. Here someone is promised property after an individual’s death, and usually on terms which are detrimental to them, although other hurdles have to be overcome in terms of evidence. Such a claim is usually made by the person promised the property when it is made apparent that legacies are included in the will which run contrary to their promised lot.
What all of these alternative routes have in common is their potential tendency to generate legal costs many times more than the will or assurance maker had contemplated. It is also likely to be much more expensive than the cost to make a gift via a valid will with the help of a legal professional. This is all of course without even taking into consideration the additional time and stress that could be put on the family member, friend or loved one to prove any such gifts.
However, these other means of gifting property could become a viable “Plan B” in some instances. For example, a valid donatio mortis causa may assist where a will has become ineffective. The practitioner, of course, needs to be made aware of any and all issues.
If you wish to discuss the validity of a will or any of the alternative means of passing gifts outside of a will, then please speak to the wills, inheritance and trust disputes team on 01752 203500 or email me via angelo.micciche@GAsolicitors.com.