Archives: December 2011
Probate – Executors and Estate Debts
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Did you know that when you administer someone’s estate as executor or administrator, you may be liable for claims from beneficiaries you were not aware of to debtors you did not know existed, when distributing the estate?
At Ziadies we can help you, the Executor/Administrator or, avoid such pitfalls. We can ensure that you are fully protected against claims from potential beneficiaries you were not aware of at the time of distribution of the estate, by arranging for statutory notices to be placed correctly.
Our experienced Solicitors will assist you through what can be a difficult process every step of the way, ensuring always that you are fully protected against any claims. In the unlikely event that litigation commences, we have the experience to advise you fully.
We can also help you administer the estate, by collecting in all the relevant information regarding the deceased’s assets and liabilities and thereafter ensuring that all the necessary steps are properly carried out: including payment of any inheritance tax liability, arrangements for the sale or transfer of any property, and the distribution of the estate.
Fees for Employment Tribunals
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The Ministry of Justice set out its options on fees for employment tribunals:
– The claimant would be charged an initial fee of between £150 and £250 to begin a claim, with an additional fee of between £250 and £1,250 if the claim went to a hearing.
– The claimant would pay a single fee of between £200 and £600 for a claim of up to £30,000 rising to £1750 for claims above this amount.
Under both options, there would be fee waivers for those on the lowest incomes. Justice minister Jonathan Djanogly said it was “not sustainable” for the taxpayer to cover the £84m cost of funding the tribunal system.
Deeds of Variation
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Post Death Deeds of Variation are a method by which the terms of a Will can be altered. They must be entered into within 2 years of the death in question. They are a very useful tax planning tool, however it is important not to rely on them to the detriment of preparing a Will as they may not be available indefinately.
A recent case highlights how the Courts view some aspects of Post Death Variations (“PDV”).
In (Wright v Garter [2011] EWHC 2881 {Ch}) the grandfather (Edward) & the father (Kieran) of a 3 year old boy called Rory, both died in quick succession, each without leaving a Will. Under the intestacy rules, Rory was entitled on the statutory trusts to part of his father’s estate (which included monies from the unadministered estate of his grandfather, Edward). It should be noted that on the statutory trusts Rory would become entitled to the capital and income at age 18.
There was no inheritance tax (“IHT”) payable on Edward Wright’s estate. Kieran Wright’s estate however, had to pay £89,000 in IHT.
Rory’s mother, Ellen, and her solicitors prepared a PDV firstly to avoid the inheritance tax “IHT” bill, and secondly to defer Rory’s entitlement to the age of 30 as Ellen felt that an 18 year old may not be able to properly control the sizeable income & capital, which would be around £750,000.
The PDV was submitted to the Court for approval. The Court was happy to approve the tax saving part of the variation, however it was not happy with that there was lack of separate representation of Rory’s interests – Ellen as one of Kieran Wright ‘s personal representatives put forward the PDV for approval and also acted as Rory’s litigation friend. Also no consideration had been given to the possibility of Rory failing to obtain a vested interest (e.g. if he died before the age of 30) and the interests of those entitled under those circumstances were also not represented.
Norris J explained that in these matters the Court had to be satisfied that the outcome was to the minor’s benefit (usually financial but not exclusively) and it was not enough to show that it does not do him any harm. Apart from the clear immediate benefit of an IHT saving of £89,000 there was a disadvantage in the proposed PDV trust which would lead to anniversary charges and exit charges. Also, the PDV deferred Rory’s entitlement for 12 years; a lengthy period. Ellen contended that the delay conferred a moral benefit in her son by preventing him from being in absolute control though able to access funds in the usual way, upon request when needed, subject to the approval of the trustees.
The Court found that the PDV was almost a resettlement rather than a variation. There was nothing in Rory’s character to suggest that he would not be able to deal with his entitlement till he reached the age of 30 and Rory had the right to have his independence as a young adult.
The Court approved a revised Variation in which:
The trustees included a professional, non- family member;
Rory became entitled to the income at 18;
Rory became entitled to 10% of the capital at 21;
Rory became entitled to the balance at 25; and
Default trusts providing for the eventuality of Rory not attaining a vested interest were included.
It is important to glean from this case the following and the private Client team at Ziadies Solicitors can advise you at every stage:
1. As an adult, it is very important to make a Will and provide for your family whatever your age;
2. The Court is happy to approve straightforward IHT saving measures and so it is important to obtain advice when dealing with an administration of an estate, especially if IHT is payable, as there may be a way of achieving a tax saving.
3. The Court will always ensure the interests of the young and vulnerable are duly protected.
4. Any trust prepared must be carefully thought out with all the eventualities considered and provided for and the interests of all involved separately represented, if appropriate.
5. It is acceptable to stagger the entitlement of a beneficiary so that they take control of funds over a period of time and not in one go – that may be a good lesson to learn when drafting inter vivos or will trusts.
Please call Louisa Calligas, Manal Fouad or Esteddar MacGreggor who will advise you in this regard.
Is It Sex Discrimination?
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The recent case of Chief Constable of Hamshire v Haque has raised questions as to what is direct sex discrimination.
It overturned a tribunal order that it had been sex discrimination to call a nursing mother on maternity leave to a disclipinary hearing. The applicant had in fact attended but said that facilities were unsuitable and claimed to be at a disadvantage.
The decision said that each case must be on its own facts and that the Tribunal should have looked at the particular circumstances.
A Tribunal must establish what the reason is for the disadvantageous treatment. Behaviour may be unreasonable without being disriminatory.
Defamation and Libel
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It is often said that publication is the essence of defamation – but what constitutes publication? A recent case has reignited the debate about when a defamatory remark can be said to have been published. More specifically, it has added to the confusion about when a claim can be struck out on ‘Jameel grounds’.
Eady J ruled that a defamatory email sent to a since recipient constituted publication and was suffieicient to found a claim for deformation. He refused to strike out the case. The defamatory email contained allegations that two claimants has committed a large-scale fraud against a royal family, and that a third claimant had knowingly assisted with this.
Historically, the orothodox view was that it was enough that the defamatory statement be communicated to one person. But recent case law testifies to a surge in the number of cases being struck out for abuse of process – precisely because the statement has been published to an insigificant number of people.
New Policy Guidance for Marriage
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On 7 November 2011 the UKBA announced the minimum age for partners to apply for entry clearance or leave to remain is once again 18 years. These new rules came into effect on 28 November 2011.
This follows a decision made by the Supreme Court in the case of Quila and Bibi v Secreatry of State for the Home Department (2011) UKSC 45.
This will affect applicants for entry clearance or leave to remain as a fiance (e), propsed civil partner, spouse, civil partner, unmarried partner or same-sex partner.
Previous refusals since 27 November 2008 can be reviewed if the sold reason for refusal was that either the applicant or sponsor was aged between 18 and 20. The deadline for seeking such a review is 31 May 2012.
Sponsor Licenses for Colleges
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New rules now in place have meant that over 450 colleges cannot sponsor new international students.
UKBA’s position is that they with to ‘cut down on abuse and raise the standards’. However, these new rules have meant that numerous institutions can no longer survive. A spate of suspensions and revocations of Tier 4 Sponsor licenses have forver many colleges to close.
However, institutions can be encourage by the decision in San Michael College Limites v Secretary of State for the Home Department (2011) EWCA CIV 1336 where the court of appeal found that the UKBA’s procedure in suspending and revoking a licence was unfair despite the college failing in some of it’s duties (inculding record keeping).
International colleges should not shy away from challening UKBA’s decision by means of Judical Review ot representations to the UKBA.
When is a guarantee not a guarantee?
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When you buy a new house normally the house will be covered by the National House Builders Contract (NHBC), giving extensive protection against defects for two years and against major damage for the following eight years (all other liabilities are excluded). The contract must be fair and reasonable, but no judge is going to say that the long-established, well understood NHBC is not fair and reasonable – although experience has shown that it is not a complete panacea.
Suppose that a major defect in construction is discovered after the expiry of the NHBC and the limitation period. Has the owner a remedy? In a recent case the owner discovered serious defects in the two flues, which necessitated the closure of the gas to two gas fires, and required expensive remedial work.
So far as the economic loss goes, there is no liability for a breach of contract as such. The builder would only be liable for personal injury – for example, an explosion – for failing to take reasonable care for the safety of the inhabitants.
The normal relationship between builder and owner does not give rise to any special assumption of responsibility by the builder. However a liability may arise if there is a special relationship between the builder and the owner of the house. Such a relationship usually arises where the client particularly relies upon the proffessional skill of the other party, such as an architect or surveyor, and that other party knows that the client will rely upon that professional skill and therefore may suffer economic loss as a consequence of ngligence on the part of the professional.
There may be a n indirect remedy for the owner of the house in public law, for example, where the building or developer obtained the planning permission and in the event departed from it and also was in breach of the building regulations, thereby leading to problems . Action by the local authority, in its discretion, might lead to some rectification but would be unlikely to yield adequate compensation for the owner.
Eviction of tenants by local authorities
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There is a proposal to amend the Housing Acts 1985 to include a power for the court to grant possession in cases where the tenant (or member of the household) has been convicted of violence against property, persons or theft linked to a violent disorder. This proposal does not contain requirement that such convictions relate to the locality of the property as the grounds currently drafted do.
The current law available to social landlords to control anti-social behaviour so far include:
- Proceedings for the breach of terms and conditions of a secure and assured tenancy;
- Proceedings for conduct causing or likely to cause nuisance or annoyance or conduct leading to conviction of a secure or assured tenant;
- Claim for a demolition order;
- Proceedings for termination of an introductory tenancy, a non-secure tenancy and a demoted tenancy;
- Proceedings for termination of an assure d short hold tenancy.
In addition, social landlords can apply for anti-social behaviour injunctions and orders. Of the different types of possession proceedings available, all are capable of being pursued on a mandatory basis. Before deciding to grant an order for possession, the court must be satisfied in all the circumstances that it is reasonable to grant an order for possession.
Unmarried Couples Jointly Owned Property
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It had been thought that if a property had been purchased in joint names by unmarried couples and therefore outside of divorce or civil procedure ancillary relief proceedings then the assumption was that the interest in the property would remain in joint names on an equal basis. In the recent judgement of Jones v Kernott the Supreme Court have introduced a concept of a change of common intention. In this case the male partner had not in fact lived in or contributed to the home for 14 years. The court has effectively said that a change in common intention can be inferred by conduct. Thos case may in facr follow Stack v Dowden where a party can gain an interest in a singly owned property by the inferred conduct of the parties.
Beware the Court also made it clear that each case must be decided on its own facts.
