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Unfortunately, disputes often arise upon the death of a family member, it is an emotional time that can be exacerbated when beneficiaries believe that unauthorized or unfair transfers were made during the life of the deceased. Aside from the emotional despair, such unauthorized or unfair transfers impact beneficiaries, as their inheritance from the Estate is reduced.

The solution is usually forensic exercises to work out which transfers were authorized or lawful; transfers that were unauthorized or unlawful will be “clawed back” into the Estate.  However, forensic investigations may be time-consuming and costly, as it usually results in litigation. According to Hong Kong’s Social Welfare Department, between January to March 2020, at least 15 cases of elder financial abuse were recorded.

Examples of unauthorized or unfair transfers

There are many ways in which unauthorized or unfair transfers may occur during the life of a testator (a person who has made a Will or given a legacy), particularly in their later years. Very often, the mental incapacity of the testator contributes to such unauthorized or unfair transfers, as he/she becomes more vulnerable. Here are a few examples:

• using the testator’s bank account or credit card without their consent;
• falsifying records or forging signatures for the testator’s Will or cheques;
• investments made without knowledge or consent – these often include high fees or trading activity that may generate commissions for financial advisors;
• inappropriate sales/purchase of insurance policies; and
• coercion into changing their Will, for example, to gift certain assets such as property title(s).

Learn more about how you can prevent unauthorized or unfair transfers here: https://www.hugillandip.com/2020/10/unauthorised-or-unfair-transfers-during-the-life-of-the-deceased/

The UK Courts were faced with an uncommon inheritance dispute relating to the commorientes rule (the term literally means “simultaneous deaths,” which applies to determining title to property) and survivorship in joint tenancy in 2019 in the case of Scarle v Scarle [2019] EWHC 2224 (Ch).

Case analysis

Introduction of the case

John and Ann Scarle lived in a bungalow in Essex. They did not have children together, but both had a daughter from previous relationships – Deborah was Ann’s daughter, and Anna was John’s daughter.  The couple was found dead in their bungalow on 11 October 2016, having died from hypothermia; John was aged 79, and Ann was 69. The bungalow was jointly owned by John and Ann (worth approximately GB£280,000) and they also had a joint bank account with GB£18,000.

Issue

The central issue in the case was which of the couple died first.  The law governing the ownership of jointly owned assets “is that the last to die is entitled the whole of the property and the sums in the account.” If Ann died first, their joint assets would have passed to John under her will, and then to his daughter Anna under intestacy rules; however, if John had died first, their assets would pass to Ann on intestacy rules, and on her death to her daughter Deborah pursuant to her will. To put it simply, the survivor “takes all”. Section 184 of the Law of Property Act 1925 (“the 1925 Act”) provides that where the order of death is uncertain, a presumption that death occurred in order of seniority (i.e. the older, John, died first).

A claim was issued in 2017 by Anna (representing John’s estate), stating that the presumption under section 184 of the 1925 Act should be rebutted – if she could prove “on a balance of probabilities, who died first” – and claimed that Ann had been the first to die, thereby making her beneficiary to the couple’s assets. Deborah claimed that “the use of the word “uncertain” [in s.184 of the 1925 Act] itself indicates that a standard of proof higher than the civil standard [of a balance of probabilities] is required to render certain that which appears uncertain”, relying on the cases Hickman v Peacey (1945) and Re Bate (1947).

Read more about the case and the final decision on: https://www.hugillandip.com/2021/04/who-died-first-survivorship-in-joint-tenancy/

In recent years, one of the main issues facing the Probate Registry has been the steady increase of ‘DIY Wills’. There are a number of ways to create a Will.

Most people will either instruct a solicitor specialised in Estate Planning on their behalf. Alternatively, people may make a homemade version using an online tool or general template. Making a Will at home seems to be the most affordable option, but the lack of professional guidance can lead to ambiguities rendering many Wills invalid, or – even worse – leading to future estate litigations which end up costing time and significant expenses.

Over the years we have come across a number of homemade Wills, as a result, we have seen a series of horror contentious stories that could have been easily avoided through appropriate and professional advice.

In cases where the homemade Will has an ambiguous meaning, the Court might ultimately have to determine the outcome for the beneficiaries. The primary objective when determining the distribution of the estate would be to ascertain what the deceased originally intended when writing the Will. This is a risky position, in fact, the Court’s judgment could significantly differ from the intentions of the deceased.

Several of our clients have encountered difficulties that include the circumstances highlighted here below.

Suicide notes

Often people write a suicide note before taking their own life, some contain final wishes regarding assets. The question is, can a suicide note can be deemed as a Will?

Due execution

Another common problem is due execution of the homemade Will. Under Hong Kong laws, a Will must be in writing and signed before two witnesses. Often such requirements are not observed in a homemade Will: usually, either the signature of the testator was not witnessed or only witnessed by one person.

Poor drafting

Homemade Wills are often drafted by individuals who are not skilled at drafting Wills. For example, a person may not be trained to draft a Will to leave a specific gift to a beneficiary, rendering a certain gift unenforceable or potentially disputable.

Read more about the circumstances here: https://www.hugillandip.com/2020/09/pitfalls-of-homemade-wills/

Who may apply?

s3 of the Ordinance provides that the following persons may apply for financial provision from the deceased’s estate:

• the wife or husband of the deceased;
• a tsip (where 妾 means “concubine” in Chinese) or male partner of the deceased by a union of concubinage;
• an infant child of the deceased or a child of the deceased who is, by reason of some mental or physical disability, incapable of maintaining himself.The above categories represent family members who would otherwise be entitled to share the estate under intestacy rules, hence a claim arises when they are deliberately excluded from inheritance by the Deceased’s Will.

The following categories of persons must have been maintained before the death of the deceased, either wholly or substantially:

• a former wife or husband of the deceased – though it is to note that such order ceases to have effect should he/she remarry;
• a parent of the deceased;
• an adult child of the deceased;
• any person (not being a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage – i.e. a step-child;
• a brother or sister of the half-blood or the whole blood of the deceased; and
• any person who was maintained before the death of the deceased, either wholly or substantially.

Only an adult child of the deceased is entitled to share under intestacy rules, so he or she must be excluded by the Deceased’s Will, yet they have to show that they were financial dependants before they are entitled to relief under this Ordinance.

At the same time, any person who was maintained, wholly or substantially, by the deceased before the death of the deceased can make a claim, irrespective of the relationship that the claimant may have with the Deceased. However, for this category of the claimant, it would be necessary to explain his or her relationship with the Deceased, leading to the financial support made by the Deceased.

What is “reasonable financial provision”?

There are two standards for deciding whether there is reasonable financial provision for an applicant, provided by section 3(2) of the Ordinance:

1. where an application is made by the surviving spouse of the deceased (or a tsip or male partner by union of concubinage), the question is whether it would be reasonable in all circumstances for them to receive such financial provision, regardless of whether the spouse needs such provision for his/her maintenance;
2. in all other cases, the Court considers whether the financial provision would be reasonable in all circumstances of the case for the applicant to receive maintenance.

In other words, in order to assist the Court in considering a claim, it is almost inevitable for a narrative affirmation to be filed on behalf of an applicant detailing the relationship between the applicant and the deceased in order to assist the Court to consider all the circumstances of the case together with documentary evidence to show that he or she has been receiving financial support. It could be painful and embarrassing for the applicant to reveal the personal relationship in lengthy affirmation which will be disclosed to other parties to the proceedings, especially when such a relationship is often not accepted by the other family members during the deceased’s lifetime which often becomes the opposite parties to such claim.

Read the full article on: https://www.hugillandip.com/2021/06/hong-kong-lawyer-inheritance-claims-for-financial-provision-of-dependants/