Can a creditor of a beneficiary of a Will challenge that Will if it disadvantages them?
According to the case of Randall -v- Randall, the answer is ‘yes’.
Inheritance and Divorce
The facts of this case are unusual. In 2006 Mr and Mrs Randall divorced. At the time it was known that Mrs Randall would inherit, at some stage in the future, a large sum from her mother. It was therefore agreed in the divorce proceedings that Mrs Randall would retain the first £100,000 of any inheritance received from her mother but the remainder would be split equally between Mr and Mrs Randall, i.e. Mr Randall would receive half of anything Mrs Randall received above £100,000.
When Mrs Randall’s mother died, her Will left £100,000 to Mrs Randall and the balance of her estate (around £150,000) to Mrs Randall’s children. Mrs Randall was appointed the Executor. This meant that Mr Randall would not receive any money.
Challenging the Will
Mr Randall claimed that the mother did not sign her Will and therefore her Will was invalid. If Mr Randall was right and the Will was invalid, then the intestacy rules would apply and Mrs Randall would receive all of her mother’s estate, i.e. Mrs Randall would receive around £250,000. Under the terms of the divorce order, Mrs Randall would then receive £100,000 and the balance of £150,000 would be split equally between Mr and Mrs Randall meaning Mr Randall would receive £75,000.
The Court had to consider whether Mr Randall was entitled to bring a claim.
Mrs Randall argued the only person able to challenge the validity of a Will were the beneficiaries under the Will or an executor and Mr Randall was neither and therefore could not bring a claim.
At the first hearing the Judge found Mr Randall had no right to bring a claim and assimilated Mr Randall’s position with that of a creditor of an estate.
Mr Randall appealed. The Court of Appeal distinguished between the positions of a creditor of the estate and the creditor of a beneficiary.
It has long been the case that a creditor of an estate cannot challenge a Will. A creditor of an estate has no interest in the terms of a Will provided the estate is administered properly as the debt will be paid before the executors pay out any legacies under the Will.
On the other hand a creditor of a beneficiary is fundamentally different. The creditor has an interest in whether the beneficiary receives money that is due to them so they can pay the debt. If such a creditor did not challenge an invalid Will or a fraudulent Will they would be left with no remedy and the beneficiaries would have enriched themselves at the creditor’s expense by allowing an invalid Will to stand. That would be unjust.
The Court therefore found that Mr Randall had sufficient interest to challenge the validity of his mother-in-law’s Will.
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