Undue Influence and Will Substitutes: Vitiating Transactions that Blur the Boundaries between Life and Death
| Published date | 01 March 2022 |
| Author | Ben Chen,Natalie Silver |
| Date | 01 March 2022 |
| DOI | http://doi.org/10.1111/1468-2230.12677 |
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Modern Law Review
DOI:10.1111/1468-2230.12677
THE
MODERN LAW REVIEW
Volume85March 2022No. 2
Undue Inuence and Will Substitutes:Vitiating
Transactions that Blur the Boundaries between Life and
Death
Ben Chen∗and Natalie Silver∗
An ageing population combined with decades of economic growth has correlated with a rise
in inheritance disputes. While many of these disputes involve wills, non-probate instruments
known as ‘will substitutes’that operate during the donor’s lifetime but also transfer specic
assets upon death are playing a signicant role.To date, the academic literature has not adequately
addressed howundue inuenceclaimsagainstwillsubstituteshave been, orshouldbe, resolved.
Our case survey reveals two distinct doctrinal approaches taken by the English courts to resolve
these claims. The rst approachtreats will substitutes as estate-planning instr uments on par with
wills; the second focuses on the lifetime operations of will substitutes.We argue that the rst
‘testamentary’approach is preferred to the second ‘lifetime’ approach.The testamentary approach
not only better promotes testamentary intent and respects relational norms, it also decreases the
risk of discrimination and paternalism against elderly people.
Keywords:will substitutes, undueinuence, inheritance disputes, testamentary gifts, joint
tenancy,jointaccount
INTRODUCTION
Should courts be suspicious of signicant gifts made by elderly donors to their
trusted relatives or friends? What if these gifts have the eect of diminishing the
elderly donors’ assets available for inheritance? These questions matter in an era
of aging populations. Recent estimates suggest that about 12 million Britons
(18.2 percent of the British population) are aged 65 years or over, and both
∗Lecturers,The University of Sydney Law School.We wouldlike to thank Joachim Dietrich, Matthew
Harding,Dar rynJensen,JeanniePaterson, Pauline Ridge, andPrueVines fortheirhelpful comments
on an earlier draft of this paper at the Private Law Early Career Researcher Conference at the Aus-
tralian National University. We are also grateful to our colleagues at the University of Sydney Law
School who provided valuable feedback through the Faculty Research Seminar Series, particularly
the HonJC CampbellQCFAAL, Matthew Conaglen, Jamie Glister, andJeGordon. Finally, we
would like to thank the anonymous reviewers for their valuable comments. All mistakes areour own.
© 2021 The Authors. The Modern Law Review© 2021 The Moder n Law ReviewLimited.(2022) 85(2) MLR 295–325
Undue Inuence and Will Substitutes
the number and the proportion of older people are projected to grow.1The
trend in population ageing has coincided with decades of signicant economic
growth.
2This combination of an ageing population and a more auent society
correlates with a steady increase in disputes over inheritance.3While many of
these inheritance disputes involve wills,in contemporary society wills are not
the only instruments that can be used to eectuate intergenerational transfer of
wealth.4Joint tenancies, death-benet nominations inpension and retirement
schemes, and life insurance are among the non-probate instruments that play a
signicant role in transferring wealth upon death.5These non-probate instru-
ments that operate during the donors’ lifetime,but also transfer specic assets
upon death have been conveniently labelled ‘will substitutes’.6
Inspired by the ‘non-probate revolution’ in the United States,7British and
other Commonwealth scholars and practitioners have recently begun to con-
front the legal challenges posed by the special characteristics of will substitutes.8
Non-probate instruments classied as will substitutes have been formally lo-
cated within the realm of contract law or property law,but not succession law.
Yet will substitutes are neither wholly inter vivos nor wholly testamentary;9they
blur the boundaries between life and death. AlexandraBraun has observed that:
Formality requirements aside,it is unclear whether and to what extent other rules
applicable towills, suchasthoseconcer ning capacity, revocation of wills, lapse, for-
feiture,undue inuence or the interpretation and rectication of wills, areapplicable
to will-substitutes. The current state of the law would appear to be incoherent on
this point.10
1Oce forNationalStatistics, ‘OverviewoftheUKPopulation: November 2018’ 1November
2018 at https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/
populationestimates/articles/overviewoftheukpopulation/november2018 (last accessed 12 Au-
gust 2020).In the UK, age 65 has traditionally been considered elderly:Oce for National Statis-
tics, ‘Living longer;Is age 70 the new age 65?’ 19 November 2019 at https://www.ons.gov.uk/
peoplepopulationandcommunity/birthsdeathsandmarriages/ageing/articles/
livinglongerisage70thenewage65/2019-11-19 (last accessed 1 June 2021).
2Since 1960, theBritisheconomy hasgrown byalmost39-fold: TheWorld Bank, ‘GDP(Current
US$) | Data’ at https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=GB (last
accessed 12 August 2020).
3For example J.Bryan,‘Trusts and Estates Cases: Can Statistics Help to Identify Trends? – Spotlight
on ProbateandEstatesCases’ (2016) 22Trusts & Trustees 962,967-969.
4This article uses the term ‘testamentary’ broadly to refer to transactions concerning inheritance
and therefore includes both wills and will substitutes. It uses the term ‘probate’to refer only
to wills, while‘non-probate’ tointer vivos transactions. Ourusageisconsistentwith the Amer-
ican LawInstitute, Restatement(Third)ofProperty: WillsandDonativeTransfers (Philadelphia, PA:
American Law Institute, 2003) § 7.1.
5See generally,section headed ‘The Doctrines of Undue Inuence’ below.
6Generally,A.BraunandA. Röthel, ‘Explor ingMeansofTransferringWealthonDeath: ACom-
parative Perspective’inA. Braunand A. Röthel(eds), PassingWealth on Death: Will-Substituteson
Death (Oxford: Hart Publishing, 2016)340.
7J.H. Langbein,‘The Nonprobate Revolution and the Future of the Law of Succession’(1984)
97 Harvard L Rev 1108.
8This was addressed by Braun and Röthel (eds),n 6 above.
9Generally A. Braun, ‘Explor ing theBoundariesofSuccession Law’ (2018)EdinburghSchool of
Law Research Paper Series 2018/15 at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=
3173672 (last accessed 23 October 2020).
10A. Braun,‘Will-Substitutes in England and Wales’in Braun and Röthel (eds), n 6 above,65.
296 © 2021 The Authors. The Modern Law Review© 2021 The Moder n Law ReviewLimited.
(2022) 85(2) MLR 295–325
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