Contentious Probate Case Studies15 Nov 2022 | Jan Atkinson
Contentious probate involving business assets
Osbornes Law acts for the defendants to a claim issued to pronounce in favour of the deceased’s last son made by the deceased’s wife. Our clients are the two adult children of the deceased and the claimant is their stepmother. There is one other sibling and another minor half-sibling. Our clients have concerns as to the validity of the deceased’s last will which was prepared by his accountant a couple of weeks before his death leaving everything to his wife. No provision is made for any of his children and at the time of making the Will he was suffering from the late stages of cancer and taking a combination of medication. An extension has been agreed to file our client’s defence due to ongoing settlement discussions which are hoped to be successful, a draft Tomlin Order is being reviewed by the claimant. If a settlement cannot be reached the defendants will be considering whether they defend the claim by putting the claimant to proof or whether they bring 1975 Act claims which they have been advised may have stronger merits. Settlement discussions have been protracted due to issues surrounding the deceased’s purchase of a business which he owned with his daughter, one of the defendants, in unequal shares and the tax that has incurred upon death. Valuations of his other business properties have also been disputed.
Ad Colligenda Grant
This is an estate administration where our client has been appointed by the court to administer the estate but is currently limited to an ability to sell the house under an ad colligenda grant, but not to distribute the sale proceeds until the underlying contentious probate claim concerning the validity of the last will of HB has been resolved. The validity of the will is being challenged as the last ‘will’ contains a legacy of £1m to HB’s carer. The challenge is based on grounds of undue influence, lack of capacity and fraudulent calumny. The dispute with HMRC as to whether very significant sums of money made available by the family to HB to cover care costs, etc were to be treated as loans or gifts has been resolved.
Probate Dispute with an estate worth £2m
Osbornes Law were appointed independent administrator in this contentious probate dispute, with an estate worth around £2m. The deceased was the majority shareholder in a property investment company. Before she died, her affairs and those of her late husband were taken over by one of their four children. That son proceeded to make large lifetime gifts from his parents’ funds and devised a ‘tax mitigation strategy’ which involved converting the property investment company into a trading company, with a view to claiming business property relief (BPR) on his parents’ deaths. Following the deaths, the son took over the estate administration with minimal assistance from professionals. BPR was ultimately accepted by HMRC but the son’s actions as director of the company and executor of the estate, including his expenditure and the mixing of estate and company funds, have been called into question. In addition, the son made large distributions to himself and one of his siblings paid himself a large ‘wage’ for his role as a company director and appears to have acquired property from the company without having paid for it. The son failed to cooperate with enquiries made by his siblings and proceedings were issued, wherein Jan Atkinson was appointed.
We are still in the process of reconciling the company/estate assets and expenditure. The company has been wound up. Once the accountant’s reconciliation has been accepted and cross-checked against bank statements, we will need to calculate the adjustments required between the estate and the company and between siblings, to make sure the four children receive the same amount in value. We have calculated the distributions required between the beneficiaries in order to achieve equalisation up to the point when the figures are not in dispute. There is still some way to go on this because a reconciliation based on company bank statements is still to be finalised as between the estate and the company. As an independent administrator, Jan Atkinson will then need, based on the advice of counsel, to propose the sum, if any, to be paid out to the siblings and then decide whether any action should/needs to be taken against the son to ensure all estate assets are fully accounted for and to make sure the four children receive the same amount in value from their mother’s estate. In the absence of an agreement to the independent administrator’s proposals, an application to court will be made to authorise the proposed distributions being suggested by Jan Atkinson, on the advice of counsel.
Contentious probate claim involving misappropriated assets
Osbornes Law acted in this contentious probate claim for the unmarried partner of the deceased involving misappropriated assets. The deceased was a famous businessman who had a substantial commercial property portfolio in London. Our client had one child with the deceased and was financially dependent on him. It has been alleged that the deceased’s older children from a previous marriage had misappropriated assets when the deceased became unwell and vulnerable. It has also been alleged that the children have inappropriately put one of the deceased’s companies into liquidation.
Contentious Probate Claim Regarding £21.5million Estate
The death of one of the shareholders of a family-run business, and the contentious probate claim regarding his £21.5million estate, required the appointment of an independent professional administrator to be appointed by the court to enable the company shares sale to proceed.
Osbornes Law acted for the independent administrator, for whom we obtained an ad colligenda bona grant and the necessary tax and commercial advice to satisfy her that the company shares sale was an appropriate commercial transaction for the estate to proceed and that the tax implications were acceptable.
Jan Atkinson Partner
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