In most cases, family circumstances and relationships will affect how someone decides to distribute their estate after they die. Relationships may have been particularly strained or individuals may estrange themselves from family members. However, these changes in relationship may not be accounted for in the will.
Individuals may not want to accept the inheritance they are technically due when relationships have broken down in such a way. In these cases, the beneficiary can “disclaim” their entitlement to the legacy. When this situation arises the question soon follows – what happens to the inheritance they were supposed to receive? This can cause disputes between beneficiaries or lead to disagreements between beneficiaries and executors.
Recent case of White v Williams
This is the situation that recently arose in the case of White v Williams.
The deceased’s will dated back to 2014 and he left his residuary estate equally to six beneficiaries. One of the beneficiaries was his son, who, in accordance with the will, was set to receive a sixth of the estate.
Complications in distributing the estate arose where the son then disclaimed his entitlement as, since writing the will, the father and son had become estranged.
The crucial question of the case was whether the son’s disclaimed share would go back to the residuary estate and then be distributed equally between the five remaining beneficiaries or whether this would be distributed according to the intestacy rules.
The will clause
The will did include a clause, whereby ‘if the distribution to each of the beneficiaries should fail, the share that failed should accrue to the other shares that had not failed and be subject to the same provisions affecting the estate.’
Fundamentally, this stipulated that the failed share should go back to the estate and be distributed amongst the remaining beneficiaries.
The legal complexities
Whilst this clause was in place, it was unclear whether the word failure extended to the circumstances where a beneficiary disclaimed a gift.
If the gift failed, the remaining beneficiaries would receive an equal proportion to the son’s share of the estate. If the gift did not fail, the son’s share would be distributed according to the rules of intestacy and the son’s inheritance would pass to his next of kin through the rules of intestacy – that would have been two of the beneficiaries and a separate individual.
The law perceives a failure as having the same effect as that individual predeceasing the deceased unless the will includes a substitution clause. A substitution clause explains how the beneficiary’s entitlement under the will would be treated if they predecease the deceased.
The outcome
The Court’s decision in White v Williams was that a disclaimed gift could amount to a failed gift in the context of substitution clauses. As there was a substitution clause that explained what would happen to the son’s share, the son was treated, for these purposes, as predeceasing the deceased due to his estrangement.
How we can help
The case of White v Williams highlights the complexities that can arise when distributing an estate. The law can seem confusing to navigate alone and we appreciate that it can be difficult to understand your legal position. Whether you disagree with a decision proposed by an executor or are trying to propose a course of action and this is being disputed, we can break down these legal technicalities and assist you with resolving these types of claims.
We are a top firm for client satisfaction and through our experience of dealing with these cases regularly, we understand that no one case is the same. We have built a reputation as good listeners and we will break down the factual matrix of your specific dispute to advise you on your individual situation.
