The UK Court of Appeals upheld a widow’s right to autonomy over her financial affairs. Their July 2019 judgment follows a year of wrangling between the widow and her late husband’s trust. An inactive charitable charity added another twist to the tale.
The Essence of the Appeal Court Judgement
# Autonomy over financial affairs is a reasonable expectation for a widowed spouse
# It is a ‘foolish assumption’ that a widow may be left ‘at the mercy of a trust’
# Parties should enter into negotiation in order to facilitate resolution of disputes
# Procedural limitations have no bearing on the court’s right to exercise its discretion
Finding Love in a Caribbean Airport Lounge
The deceased husband, Michael Cowan introduced the black bin liner to the UK according to Mondaq.Com. When he died in 2016 he left an estate worth £30 million. He met a Californian lady named Mary in a Caribbean airport lounge in 1991 and they became friends.
After two years of correspondence Michael Cowan divorced his wife, whereafter the lovers bought a home together in Montecito, California. They cohabited happily for fifteen years until Michael developed a brain tumour.
The pair married before he died two months later in February 2016. Then lawyers entered centre stage because Michael Cowan left a complicated will.
How a Trust Denied the Widow Her Reasonable Expectation
Michael Cowan’s estate was at just under £30 million for probate. He left it in trusts that defaulted to a charitable foundation that never got off the ground. He also left a letter of wishes that the trust regard his second wife Mary as principal beneficiary.
A letter of wishes is a confidential document that can supplement a will, but not override it. Therefore its contents were not legally binding and Mary was dependent on the goodwill of the trustees. They owned the Montecito house she lived in and could even evict her if they wanted to.
She came to an arrangement whereby the trust paid her living expenses and uninsured medical costs, which can be high in California. Then her bubble burst six months after grant of probate when the trustees questioned her medical expenses.
How the Legal Battle Played Out in the UK
Lawyers determined the matter had to be resolved under UK law. Mary gave notice of a claim for ‘reasonable financial provision’ in December 2017. Twelve months of negotiation followed before communication broke down and the solicitors agreed a standstill in the claim.
Mary formally issued her claim in October 2018. However, the will and charitable foundation trustees both objected because the claim was out of time and therefore no longer valid. In February 2019 Mr Justice Mostyn rejected Mary’s claim because:
# Her claim for reasonable financial provision was bound to fail
# Her delay in bringing the claim was not excusable
However, he did suggest Mary sue the trustees for a breach of trust if they refused to follow her late husband’s letter of wishes.
How the Court of Appeal Resolved the Matter
The Court of Appeal decided the judgement was ‘clearly wrong’. It also hammered solicitors generally for making standstill agreements ‘In what are often highly distressing and sensitive cases”. The trust will therefore have to allow Mary financial autonomy and at least her story has a happy ending.
