Generally, an unsuccessful party who commences or contests litigation generally pays the successful party’s costs. When a claim is made against an estate there can be significant money expended which would otherwise flow to beneficiaries. When making wills or when administrating an estate every care should be taken to prevent estate assets being consumed in legal disputes.
Recent decisions handed down by the Supreme Court provide a reminder to parties involved in estate litigation to consider a number of circumstances that allow for legal costs for a claimant to be paid from the estate, which include where the deceased’s conduct is the cause of the litigation. In order for this costs application to be successful, there must be:
- Lay or medical evidence that raises doubt about the deceased’s mental capacity;
- Evidence of suspicious circumstances surrounding the execution of the will; or
- Evidence that raised doubts as to the deceased testamentary capacity because of the manner in which the deceased went about making their will
The Court will also consider whether an investigation of their circumstances is reasonable, which may include whether there is any medical or lay evidence raising doubt as to the deceased’s cognitive capacity, absent which there may not be a reasonable cause for investigation of the deceased’s will.
When considering capacity to make a will, a person has the requisite capacity to execute a will, if that person:
- Is aware of, and appreciates the significance of a will;
- Is aware, at least in general terms, of the nature, and extent, and value of their estate;
- Is aware of those who may reasonably be thought to have a claim upon their estate, and the basis for, and nature of, the claims of those persons; and
- Has the ability to evaluate, and to discriminate between, the respective merits of the claims of such persons.
The court determines the existence of testamentary capacity by weighing up the evidence of solicitors assisting the will maker against medical expert evidence. To ensure the best protection is available to the wishes of an executor from future claims lawyers and doctors often need to work together so that assessing legal capacity is informed and supported by medical information.
Other exceptions can arise where proceedings are for the benefit of the estate, in which case costs may be paid out of the estate.
That said costs do not always fall on the unsuccessful party where proceedings are seeking family provision so competent representation and advice early on the merits of a claim should be obtained if you are an executor or if you are considering making a claim. The legal personal representative’s costs are usually paid from the estate unless they have acted improperly so again, guidance in the administration of an estate should be sought from a suitably qualified lawyer with experience not only in estates, but in the conduct and defence of estate litigation.