The Court of Session last week issued a judgment in the case of Gordon Turner -v- John Turner and others, in which the issue to be determined was whether disposal of an item of property by an attorney resulted in the bequest of that property in the granter's will being cancelled - a question which, until now, has never been considered by a Scottish Court.
Background
In 1996, Miss Gordon granted a power of attorney in favour of a solicitor which included power to sell any part of her estate, confirming that any action taken by him would be "valid and binding as if done or granted by myself". Subsequently, in 1997, she made a will which included a bequest of her house to a named individual, John Gordon.
In 2001, Miss Gordon became incapable of managing her own affairs and moved into a nursing home. The attorney then sold the house but, crucially, the sale was not required in order to meet the nursing homes fees but only as a tidying up exercise.
When Miss Gordon died in 2008, one of her residuary beneficiaries claimed that the legacy of the house had been adeemed (ie cancelled) which would have had the effect of increasing his share of the estate. This was opposed and it was argued that John Gordon was entitled to the proceeds of the sale as a substitute for the house.
Decision
The Court decided that the specific legacy of the house would only have been adeemed had the sale been necessary to fund Miss Gordon's care. As the sale was simply a prudent act of administration the bequest of the house had not been adeemed. John Gordon was therefore entitled to receive a sum equivalent to the proceeds of the sale of the house.
Comment
This decision clarifies the position of a beneficiary of a specific legacy under a will. He/she may not receive that legacy if it becomes necessary to sell that particular piece of property in order to meet necessary costs where there are no other funds available. However, where a sale is not necessary and where the will contains a specific legacy of the house, it would be prudent for the Attorneys to retain the sale proceeds as a separate fund, which the beneficiary will inherit at the end of the day.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
