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Trusts and Estates Law and Tax Journal: March 2011

Penelope Reed QC introduces an issue devoted to articles by the barristers of 5 Stone Buildings

The members of 5 Stone Buildings are delighted to be back writing for this edition of the Trusts and Estates Law & Tax Journal. Last year proved to be a fertile source of articles with members of chambers involved in litigation that hit the headlines, not just of the legal and technical journals, but also the national press.

Jordan Holland analyses the Court of Protection’s obligations to enforce international orders after Re MN

Since the coming into force of the Mental Capacity Act 2005 (the 2005 Act) in October 2007 there has been a good deal of judicial discussion of the manner in which the statutory best-interests test is applied. However, perhaps somewhat surprisingly given that multi-jurisdictional estates are increasingly common, the judgment of Hedley J in Re MN [2010] is the first occasion on which the problematic provisions of schedule 3 of the 2005 Act, and their inter-relationship with the court’s enquiry into an incapacitated person’s best interests have been considered. Re MN gives helpful guidance on the court’s approach to its jurisdiction under the 2005 Act and the role of the best-interests test in cases where the court of a foreign jurisdiction has made orders affecting the person who is the subject of an application to the court. But, as this article will seek to show, the problematic nature of schedule 3 means that Re MN leaves at least as many questions unanswered as it answers.

Penelope Reed QC and William East look at the removal of trustees

When faced with trustees taking decisions they do not agree with, it is often the kneejerk reaction of disgruntled beneficiaries to seek to have the trustees removed. In cases where the conduct of the trustees amounts to a clear breach of trust, then it may not be too difficult to persuade the court to order removal. In cases that are not so obvious, however, an application to the court may prove to be frustrating, expensive and ultimately unsuccessful.

Ruth Hughes reviews case law to present the up-to-date position on presumed undue influence

Equity protects so that injustice may not be perpetrated. In the context of lifetime gifts, in some situations there will be a presumption of undue influence that may vitiate a transaction such that it can be set aside by the court. However, the presumption of undue influence can be rebutted by showing that the gift was made as a result of ‘full, free and informed thought about it’ (see Zamet v Hayman [1961]).

Re G (TJ) has valuable lessons on the role of substituted judgment in statutory wills and gifts, as David Rees outlines

The Court of Protection and its predecessors have long enjoyed jurisdiction to authorise gifts and settlements out of the property of persons who lack capacity (or ‘patients’ as they were known until 1 October 2007). Under the Mental Capacity Act 1959, the Court of Protection had authority to make provision from the patient’s estate for other persons or purposes for whom they might have been expected to provide if they were not mentally disordered. In 1970, the court’s jurisdiction was extended by s17 of the Administration of Justice Act 1969 to enable it to authorise the execution of a will for the patient. These powers were re-enacted by the Mental Health Act 1983 and were latterly to be found in ss95 and 96 of that Act.

Vinton v Fladgate Fielder gives some indication of the current approach of the courts towards negligent IHT planning, explains Michael O’Sullivan

Since the somewhat unsatisfactory decision of the Court of Appeal in Daniels v Thompson [2004] there has been confusion as to who has the right to sue where an inheritance tax planning transaction has gone wrong. In the recent case of Vinton v Fladgate Fielder [2010] the court had to consider such a situation. However, unfortunately the court considered the question in the context of an interlocutory application by the defendant and so it was not necessary for the court to arrive at any definitive conclusions. The judgment does, however, provide helpful clues as to how a court might approach a similar substantive case at trial.

Henry Legge examines some oft-overlooked points concerning international testators

In this article, I will focus on two particular problems that arise when you are dealing with a testator who is not dyed-in-the-wool English. The two provisions I am going to deal with can lay a convincing claim to being the aspects of the English law of succession that are more frequently ignored than any other. However, where they do apply they are both of great practical importance.

The case of Kings v Bultitude has lessons for the failure of a residuary gift as well as casting light on a colourful part of church history, as Barbara Rich finds out

In early January 2008, Mrs Pamela Schroder died and left the residue of her estate: