This article does not deal with a legislative provision, or any recent court decision. Nor does it give an insight into why insolvencies arise or the way they are managed. But we think the facts might be of interest to our readers as they shine a light on the sort of difficulty which a bankruptcy trustee can face, if not every day, then at least from time to time.
A Worrells partner is the trustee of a bankrupt estate in circumstances where the lady bankrupt holds a one third interest in a residential property. The other two thirds interests are held by the bankrupt’s siblings. The bankrupt and her siblings received their interest from their father by way of gift way back in 2002. At about the same time the father executed a Power of Attorney in favour of his son. Perhaps significantly the father had remarried shortly before making the gift.
Soon after making the gift the father executed a new Will under which he left all of his remaining assets to his three children and nothing to his new spouse.
By agreement (and unsurprisingly) the father and his new spouse continued to live in the gifted property until the father’s death in 2010. The spouse continues to live in the property.
Following the death of the father the spouse produced a further Will for the father (which was hand written) and dated during 2006. In that Will all of the father’s property is left to the spouse. It is alleged in the Will that the property gift (in 2002) was made under duress and the Will purports to grant to the spouse the right to recover the property for the benefit of the deceased estate, of which she is the sole beneficiary.
The spouse has now filed an application to have the 2002 gift set aside and the residential property transferred to the deceased estate. The applicant was until our appointment unrepresented, but as best we can understand her case she pleads that the gift should be set aside because:
1. It was made under duress
2. The father was suffering from dementia at the time of the transfer
3. The transfer of the property is tainted in some obscure way by a breach of The Powers of Attorneys Act
The spouses pleadings don’t explain why the father did not attempt to have the gift set aside prior to his death some eight years after the event. Clearly his evidence concerning the relevant circumstances would have been of vital interest to a court.
Although not specifically addressed in the pleadings we assume that the spouse argues that, although the father suffered from dementia in 2002, that condition had been cured by 2006 being the date of the further Will. If that was not the case the efficacy of the second Will must be brought into question.
We are also puzzled by the alleged breach of The Powers of Attorneys Act as it seems clear that the original transfer was executed by the father personally and not by the Attorney.
As the trustee of the bankrupt estate we must now get involved in this family dispute. More to come as the case proceeds.