The case of Sally Challen (R v Challen  EWCA Crim 916) has been a particularly interesting one in recent news. For those of you who are not aware, Sally was sentenced to life imprisonment in 2011 after murdering her husband. The conviction was overturned last year, following a change in the law, on the grounds of her husband’s coercive and controlling behaviour. She successfully appealed for a charge of manslaughter with diminished responsibility, for which the judge deemed her time served.
This gave rise to a new question: could Sally now inherit her husband’s estate?
The Forfeiture Rule is a common law rule which states that a person cannot inherit an estate where they have caused that person’s death. This also includes anyone who has aided in a murder, manslaughter or suicide. This rule is in place as a matter of public policy and prevents the plot of many a murder mystery from playing out in real life.
On the face of it, Sally Challen was excluded from inheriting her husband’s estate. The Courts do however retain the right to provide relief and to disapply the forfeiture rule under s2 Forfeiture Act 1982, and have done so in a few recent cases where it was thought that the result of the rule would lead to an unjust outcome. Relief was granted in the particularly poignant case of Ninian v Findlay, in which a wife reluctantly helped her terminally ill husband travel to Switzerland to end his life. The forfeiture rule was also altered by the Forfeiture Act 2011, following the case of Re DWS, so that the person who has forfeited their inheritance is treated as having died before the deceased, to enable their offspring to inherit under the intestacy rules. Under earlier rules the person who had forfeited their inheritance was treated to have survived and so no one of their lineage could inherit, regardless of culpability.
In Sally’s case, she wished to disclaim her interest, in favour of her children. However, if the forfeiture rule remained in play, then any tax benefits that could be achieved by a transfer through her would be lost. Her children had been key campaigners for her release and so the judge found in her favour and disapplied the forfeiture rule.
There is however more than one way to be excluded from benefiting from an estate. A forfeiture clause can also be applied to an estate by a Will (known in Latin as an in terrorem clause, or ‘in fear’!). This operates in a different way and is designed to prevent a challenge to a Will by a beneficiary who may not receive what they expect. With careful drafting, a forfeiture clause can be included to state that any beneficiary who challenges the terms of a Will automatically loses their right to benefit under that Will. In effect, a beneficiary would need to be confident that they would receive more through the courts than under the Will, if they want to bring a claim. They otherwise risk walking away with nothing (or potentially owing large amounts in legal fees). This type of clause needs to be explicitly included in the Will and cannot be inferred retrospectively.
If you have any questions in relation to an estate, or if you wish to discuss the best way of drafting your Will, then please contact a member of our Wealth Management Team to discuss.