A Statutory Will – What is it and when might it be useful?

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Elderly ClientsMost will be aware of the role of a Will; the document in which the individual making the Will sets out their wishes in relation to how they would like their estate to be divided upon their death.

It’s a pretty morbid thing to think about “what do I want to happen when I die?” but, as they say, there are only two certainties in life – death and taxes.

Aside from setting out how your estate is to be divided, a Will has many other helpful functions and we’ve explored some of these in a previous blog “A simple Will?”, so we won’t revisit them here.

But what happens if you don’t make a Will? For those that don’t make a Will, then the rules of intestacy (that’s the legal term for dying without a Will) apply. In other words, the law dictates how your estate will be divided and this is not always as you may think, and it may not be as you would choose.

We won’t explore the detail of how the rules of intestacy work, that’s for another day, another blog. Instead, we’d like to look at what can happen where a person loses capacity before getting around to making a Will. For an individual to make a Will, they must have “testamentary capacity”. That’s another way of saying the mental capacity (ability) to make a Will. The test for whether an individual has the mental capacity to make a Will is clearly set out in case law and can be drawn back to the three key principles set out in the well reported Banks v Goodfellow case:

  • The individual must know what a Will is and what it does;
  • They must have knowledge of their estate (e.g. what assets they have); and
  • They must have awareness of the different moral obligations to certain individuals (e.g. the need to provide for spouse, children etc).

Not all individuals can satisfy this test. However, that doesn’t mean that their estates are condemned to pass in the way that the law dictates under the intestacy rules, or indeed under any previous Will which is no longer be appropriate.

Where an individual lacks the mental capacity to make or revise their Will, the Court of Protection has special jurisdiction to authorise the making of a Statutory Will on their behalf. The Court’s authority to do so comes from the Mental Capacity Act 2005.

Anyone with an interest in the incapacitated individual’s affairs (“P”) can apply to the Court of Protection seeking an order to make a Statutory Will for P. For example, their spouse, sibling, relative, perhaps close friend turned long term carer, or even their financial deputy. We certainly wouldn’t recommend that you make such an application without our specialist guidance or other independent legal advice.

Legal advice is essential for two key reasons. The first is that there is a very strict procedure to follow, including providing the Court with a copy of the proposed Will. The second is that the Court will only make an order authorising the Statutory Will to be made if it is in P’s best interests. There is a considerable amount of case law on how the Court will determine whether the making of a Statutory Will is in P’s best interests. By way of example, the Court will look at the following factors, amongst others, when deciding whether the making of Statutory Will is in P’s best interests:

  • The circumstances for making the application;
  • P’s present wishes and feelings, if known;
  • P’s past wishes and feelings;
  • Whether it is important for P to be remembered as having done the right thing; and the list continues

As with any court application, the court process can be time consuming and costly. There are many parties to consult in the process, not least the Official Solicitor who is nearly always invited to act as P’s litigation friend in the proceedings, to promote P’s interests.

That said, the Statutory Will process is not to be overlooked and can have many benefits both for P and their family in the long term. We have assisted clients to make Statutory Wills in varying circumstances, for example where:

  • P has been financially abused and the Statutory Will may be used to rebalance the division of the estate on death (i.e. away from the abuser);
  • P has a complex estate such that it is necessary and proportionate to appoint a professional executor;
  • P’s estate is chargeable to inheritance tax (“IHT”) and authority for IHT planning can be included as part of the application; and
  • P previously made a Will but that Will is no longer suitable, perhaps because the relative they previously provided for is now a vulnerable beneficiary and there is now a need to consider trusts to protect the provision being made.

The final point we’d like to highlight in this brief overview is that the Court is unlikely to entertain a Statutory Will application where the primary purpose is to pre-empt or resolve the outcome of contentious probate application (i.e. where somebody is likely to dispute P’s present Will on death) ahead of time.

We have extensive experience in navigating the Statutory Will process, so please don’t hesitate to contact us if you think our advice could be useful to you or your relative.