Division of estate

In 2005, A and his partner B are named as the parties to a deed of agreement in which it is stated that the parties wished to enter into the agreement so as to regulate A’s obligations towards B, that they intended that it be legally binding on them and they declared that they had each had the benefit of independent legal advice.

The agreement states that in consideration of A’s long-standing natural affection for B, A covenanted irrevocably with B that on his death his estate “shall be charged with the payment of the sum of £100,000 in priority to any other provision whether testamentary or otherwise affecting his estate” to B.
The deed was only signed by A and there is only one witness.

A few years later A made a Will dividing his estate equally between B and his daughter. There is no mention of the deed in the Will.

A has now died. I would be interested to hear what members views are regarding the effect of the deed in relation to the division of A’s estate.

Patrick Moroney
BWL solicitors

My view, for what it is worth, is that the deed executed by A is not capable of altering the distribution of his estate in accordance with the terms of his Will. It did not create a trust when it was executed therefore cannot be utilised to distribute £100,000 from his estate to B before residue is ascertained. It is not therefore a testamentary document. I should be glad to see the views of others.

Patrick Moroney
BWL solicitors

Whilst the Law Commission was doing its roadshow in support of its review of wills, I am sure a very similar question was put to Professor Hopkins. He opined that as such a document was to take effect only on death it would need to comply with the formalities of the Wills Act 1837. In view of this, I would be unwilling to give effect to such a deed without a strong supporting opinion from Chancery counsel.

Whilst arguable that the other beneficiaries could authorise the executor to give effect to the deed, unless it is a “fully informed” decision such an arrangement might effectively be a “hostage to fortune”.

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals

Where X promises by deed to leave Y, say, £100 or a boat or even not to revoke his will all these are valid. Any binding agreement must be enforced by the PRs and take precedence over the contents of the will itself.

This, if correct, would then mean that on A’s death the division of A’s estate between B and A’s daughter is after the £100,000 gift.

Any failure to leave the £100,000 to B would be a breach of contract resulting in a claim for damages against A’s estate.

Malcolm Finney