A recent story on the BBC News website, regarding a man
who was jailed for sharing his father's industrial
compensation, brought home the stark reality of how easily the
situation could have been avoided just through seeking wealth
protection advice.
John Kennedy's father died of asbestosis in 2001 and after
his death he shared the compensation with family members in
accordance with his father's spoken wishes. No Will or specialised Industrial Disease
Trust was left.
Before his father's death, John's mother was admitted to
a care home and, as the family had limited savings, her care was
funded by the Local Authority.
In 2005 £90,000 was paid in compensation for the
industrial injury and, as there was no Will or Industrial Disease
Trust, all of the funds should have passed to John's mother
under an intestacy. These rules state where your money should go if
you do not leave a Will.
However John, with good intentions, decided to honour his
father's wishes and effectively took charge of the decision as
he held a Power of Attorney for his mother. After a
family meeting it was decided to share the money between various
family members.
Unknowingly these actions led to devastating consequences and John
was charged with benefit fraud, as the money should have passed to
his mother to help pay for her nursing care. John was
convicted and sentenced to nine months in prison
suspended for two years. However, as he was unable to pay the
money, which had been spent, he was jailed and served four months
in prison. John's criminal record has now affected his
employment prospects and each month he has to pay a nominal sum
from his benefits towards his outstanding debt.
Since then, due to his mother's health, the family
successfully applied for the nursing home fees to be met by the NHS
as she qualified for continuing health care and if they had
seen a
solicitor about this in the first instance then John may never
have been charged over the incident.
The final outcome for John could have been avoided by
any of the following:
John's father could have made a Will leaving his assets
(even future assets) in the way that he would have wanted. That way
he would not have been bound by the intestacy rules.
John's father could have set up an Industrial Disease Trust before he died asking
for funds in the future to be placed in Trust and be divided how
his chosen Trustees saw fit. A private Letter of Wishes from
John's father to the Trustees would have guided them and the
Trust could have been set up with a £10 loan which would then
be repaid when the funds finally came through. This is more
complicated than a Will but allows Trustees to distribute in the
proportions they see fit at that time rather than set amounts under
a Will.
The family should have taken advice about the continuing health
care funding for John's mother although health requirements
usually have to be quite advanced for this to be granted.
It is understandable that families, where a member has been
diagnosed with asbestosis, may not want to have to consider these
issues at times of great family stress. However, speaking to a
lawyer a little earlier would have avoided the difficult position
that John found himself in, probably the last thing that his father
would have wanted or anticipated.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
A legal services order may be worded so as to provide that it will be for a specified period of time or for the purposes of a specified part of the proceedings.
The case of Hawes v Burgess and another [2013] EWCA Civ 74 is recent Court of Appeal decision reminding Probate practitioners of what steps must be taken to ensure that Wills they draft are upheld.
A well-meaning friend, relative or even a carer of a deceased person may take what they believe are helpful steps to tidy up a deceased’s affairs in the days following their death to pave the way for those who will carry out the administration of the estate.
In the course of a divorce or dissolution of a civil partnership attentions are quite rightly focused on the lives that each party will lead once the separation has been finalised.
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