I have yet to bear witness to a truly uncomplicated family. One where harmony and selfless love are in abundance and where adult children genuinely have each other’s needs as much at heart, as their own. Much less, where money is concerned. Much, much less where the parents are no longer there to referee.
Parents often want to believe that their adult children will be able to ‘sort things out’ fairly, including their estate when they pass away. Sometimes, this happens. Often times, it doesn’t. When it doesn’t, it costs their children dearly.
A tale of three tragedies
Introducing the tragic, but legally fascinating case of John and Marjorie Scarle, who were both found dead, by police, in their Essex bungalow, on 11 October 2016. Their death is the first tragedy, both having died of hypothermia within hours (or days) of each other, in different parts of their home.The second tragedy… a 3 year court battle, over their £300,000 estate. A legal battle that ended in a High Court ruling - and that cost £179,000. The third tragedy is the one I find most poignant. Who were this couple, John and Marjorie? How would they want to be remembered? I would guess that John and Marjorie Scarle, like most people, would have wanted to be remembered for the positives in their lives. The mark they made on theworld through their personalities, interests, contributions, work… Not as starring roles in a court case that serves as a warning about the perils of incomplete legacy planning.
John and Marjorie each had a daughter from previous relationships; John’s daughter, Anna Winter and Marjorie’s daughter, Deborah Cutler. We can’t know what the relationship between Ms Winter and Ms Cutler was prior to their parents’ death. Sibling relations are often complex enough when related by blood. When blood is not shared, sometimes the connection between step-siblings dies along with the parent. And if there is money at stake, things can get ugly.
It is likely, had Mr & Mrs Scarle taken advice and written their Wills together, that they would both have chosen to split the estate between their daughters, to be divided upon the second death. In fact, Mrs Scarle did have a Will, in which her daughter was the sole beneficiary. Mr Scarle did not, in which case his estate would pass under the “rules of Intestacy”.Introducing the “rules of Intestacy”If a person dies without a Will, the estate passes under a set of very rigid rules known as the rules of Intestacy. The rules of intestacy state that the first £270,000 automatically pass to a surviving spouse, then the remainder of the estate is split 50-50 between the remaining spouse and the direct descendants (children). If there is no spouse, the entire estate passes to bloodline descendants. Under the rules of Intestacy, step-children have no rights to inherit and are not considered. And an added, important, technicality about this case in Mr and Mrs Scarle’s case, their estate consisted of a house that they owned jointly and savings held in joint names.
When you own assets jointly, the jointly owned assets automatically transfer to the surviving co-owner upon death. So, they do not form part of your estate. So, upon first death,effectively the Scarle’s whole estate would have passed to the surviving spouse. But the problem in
this case was… who died first?
Who Died First?
Ms Winter’s legal argument focussed on forensic evidence that suggested that Mrs Scarle, 69, died first. If proven, this would mean than upon Mrs Scarle’s death, the jointly owned house and savings would automatically transfer to Mr Scarle. When Mr Scarle died, the entire estate would pass to his daughter, Ms Winter, under the rules of Intestacy.
Ms Cutler refuted the forensic evidence, stating that it was inconclusive. Without proof of who died first, she argued that, under the Law of Property Act 1925, there is a ”presumption” that, as the elder of the two, Mr Scarle, 79, had died first. If Mr Scarle died first, her mother would have owned the entire estate prior to her passing, which she passed to her daughter, Ms Cutler, via her Will.
Reaching a settlement Under these circumstances, where an estate is under Intestacy, or partial Intestacy – or where there is any unclarity about how the estate should be distributed, it is possible that family members could reach an agreement. If everyone is in agreement, a legal variation can be applied (in effect writing a Will after death) and the agreed split can be honoured.
However, in this case, the step-sisters could not reach an agreement.
During the final hearing, the court heard that Marjorie’s daughter, Ms Cutler, made a number of attempts to settle the case by dividing assets - at one point offering a 60-40 split in Ms Winter’s favour. All of Ms Cutler’s attempts were rejected by Ms Winter. James Weale, representing Ms Cutler, said his client could not have done any more to resolve the dispute. ”This claim should never have got to trial,” he told the judge ”She was met with stubborn intransigence on the part of (Ms Winter) who refused to make any reasonable attempt to engage in settlement negotiations at any stage.”
At the conclusion of the 3 year battle, Judge Philip Kramer ruled in favour of Ms Cutler. He concluded that the timings of death were inconclusive; the rates of decomposition could be explained by the different ”micro-climates” in the toilet, where Mrs Scarle’s body was found, and the lounge, where her husband was discovered. He said the presumption in favour of the older person dying first, enshrined in the 1925 Act, would therefore apply.
Judge Kramer ordered that Ms Cutler should receive the whole estate and that Ms Winter would pay £179,000 in legal costs.
Prevention is much cheaper
I would imagine if Mr and Mrs Scarle could see into the future, they may have decided to get their legacy plans in place. People ‘put off’ writing their Will for lots of reasons, but, with the right advice and guidance, it is much simpler than people assume. At Maplebrook, we aim to have your Will in place within 2 weeks and we will provide advice on your situation and how to ensure your wishes are met. We are significantly less expensive than a £179,000 legal bill! More importantly, your loved ones will be grateful to have the certainty and clarity, at an already traumatic time, that legacy planning ensures.