The importance of estate planning - deciding "who died first"
The importance of estate planning – deciding “who died first”.
In the first case of its kind since 1950 Judge Kramer in Scarle –v- Scarle was asked to answer the question that many clients have “what happens if we die together or at the same time”.
Where there is uncertainty about the order of death of a couple, s184 of the Law of Property Act 1925 creates a presumption that death occurred in order of seniority, to put it simply the order of birth is deemed to be the order of death.
On 11th October 2016 John Scarle (aged 79) and his wife Marjorie Scarle (aged 69) were found dead in their bungalow in Essex. Both had children from a previous marriage.
As the property was owned as joint tenants the person who died second would inherit the property by survivorship and in turn their family would inherit the estate. This meant that the relatives of the person who died first would inherit nothing.
Mr and Mrs Scarle were found to have died of hypothermia in different areas of the property. If Mrs Scarle had died before Mr Scarle he would have inherited the house, this would then have been inherited by his daughter, Anna Winter, by way of the intestacy rules. On the other hand, if Mr Scarle died first then Mrs Scarle would inherit the property and pass it to her daughter, Deborah Cutler through her Will.
The daughter of Mr Scarle had argued that although her father was older, he was in much better health than Mrs Scarle and had been the full time carer for his wife in the final years of her life. Ms Winter argued that it was therefore more likely that Mr Scarle had outlived his wife. Despite expert evidence in the case relating to the cause of death and decomposition of the bodies, it was not possible to conclude with any certainty who had died first. Indeed Judge Kramer said that the evidence suggested that Mrs Scarle had died first, however as a result of this uncertainty, the Judge concluded that s184 would prevail and awarded the entire estate (worth approximately £300,000) to Mrs Scarle’s relatives.
The Judge also highlighted that the representatives of the estate of Mr Scarle had shown no willingness to mediate which would have mitigated costs and potentially avoided court.
James Weale, Counsel for Mrs Scarle’s estate, is reported to have said the Defendant “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.” Judge Kramer ordered that Ms Winter as the Claimant pay the Defendant’s costs on the “indemnity basis”. Indemnity costs are often used to penalise one party for their conduct in proceedings, in this case unreasonably refusing mediation.
Ms Winter has been ordered to pay £55,000 of legal costs for the Defendant the balance of which is to be assessed. She is also left with her own bill which is thought to be in the region of £95,000.
This case highlights the importance of succession planning especially if you are part of a blended family or second marriage. It is increasingly important in today’s society to seek expert advice from a solicitor to ensure that your family is looked after whatever situation might arise.
For those engaging in any form of litigation this case should act as a cautionary tale of what can happen if you do not engage in mediation or try to negotiate a settlement.