The charitable divide: why lawyers either side of the channel take a different approach to contentious probate

The news that the number of challenges to wills by relatives feeling charities have been left too much money has trebled over the past few years. Two recent cases involving animal charities, the RSPCA and A Home For Lost Dogs charity, battling with the family of one would-be legacy donor for their share of her will, illustrate the point perfectly.

Yet only 100 miles or so across the Channel, in another jurisdiction that otherwise shares so much of our legal experience as part of the EU, France's approach to charitable giving in wills, to probate generally and to litigation in this area, is completely different. In this age of the shrinking global village, people's business and personal affairs, their property interests, their marriages, divorces and families increasingly cross borders. And the differences they bump up against as they cross legal jurisdictions add new layers of complexity for the lawyers advising them in this area. It is a minefield for the uninitiated and advisers should tread with extreme caution. The contrast between the English and French approaches to succession that we are examining here is just one example. The fact that even such close geographical neighbours can take such a contrasting approach flags the dangers well.

The first major contrast with the UK to note is that France has a very different culture when it comes to charitable giving to start with, so legacy donations are fewer and therefore so are challenges to wills on the basis of a contested legacy. There are far less charities in France, in part because the State is expected to play a bigger role in the sort of provision for which many charities in the UK are relied on; in part because tax reliefs for charitable giving in France are so paltry, including for the equivalent of inheritance tax reliefs (in many cases limited to a saving of only ‚¬500 or so); and last but by no means least, in part because a huge money laundering scandal in the late 1990s involving France's most famous cancer charity killed off any enthusiasm for charitable giving the French public might have had before.

Free will

The next important difference to note is that the UK and France differ fundamentally as to the extent to which an individual should in principle be free to decide who gets what when they die. In the UK, challenges to the arrangements made by testators fall into two main categories: first, whether the testator was acting voluntarily with a full understanding of what he or she was doing. Such claims allege incapacity, want of knowledge or approval or undue influence; second, whether the testator was under an obligation to make different arrangements, such as applications under the Inheritance (Provision for Family and Dependants) Act 1975 and estoppel claims.

In terms of the ability to challenge a will in France, the first point to understand is that there are three different types of will with different protections to challenge: public ('testament authentique', both witnessed and authorised by the notaire); holographic (not witnessed); or secret (there must be a witness to the notaire's receipt of this hand-written will, but it is in a sealed envelope and neither notaire nor witness will know the contents). All are equally valid in terms of evidential value as long as they meet the criteria of the Code Civil.

However it is much harder to challenge a testament authentique, compared to a hand-written will, because it entails proving a fraud. This form of will has special protection under the Code Civil requiring specific proceedings, both civil and criminal, to challenge it.

It is perhaps not that surprising to hear that UK challenges on the ground of incapacity are increasing. The population is ageing, rates of dementia are increasing sharply, fierce competition in the will-writing market is making it increasingly challenging for will writers to spend sufficient time on taking instructions, and the increase in the value of property over the last decades makes litigation more worthwhile.

Golden rule

A disturbing number of solicitors still ignore the so-called 'golden rule' which requires that a medical opinion as to capacity should be obtained when taking instructions for a will if there are any factors indicating the possibility of incapacity. No doubt this is making a contribution to the spike in contested wills.

At the same time, it may have been relatively easy in the past to make some assessment of a person's capacity retrospectively from their medical notes, but these days more objective medical note taking, tick-box forms and computer-generated discharge letters make a retrospective assessment nigh impossible.

A French notaire's duty to check a testator's state of mind is much less arduous. It is a judgment call - and is '¨called into question far less than might be the case in the UK because of other factors that limit the ability of a testator to make unilateral decisions about who gets what on their death.

In France a testator's power to dispose of their assets is strictly set out in the Code Civil. Being so prescribed, this significantly reduces the scope for challenging wills. Testators cannot, for example, disinherit their children - even if living abroad. This "forced heirship" rule affects even foreign nationals living abroad, i.e. even an English testator living outside France, if their children are French. However, a new EU regulation could dramatically change the scene and enable English nationals to be free from forced heirship.

The 'Succession Regulation' 650/2012 (4 July 2012) ushers in two main changes. The first is that succession of a deceased's estate is now to be governed by one jurisdiction, (being the place that was the 'habitual residence' of the deceased), whereas currently the issues around 'movable' property are governed by the laws of the jurisdiction where the deceased lived, but 'immovable property' (eg real estate) is governed by the law where the property itself is located. So a probate may be governed by several different jurisdictions.

The second major change introduced by the new regulation is that a foreign testators with interests in France will now be able to nominate that his national law govern their succession arrangements, thus enabling them to step out from the 'forced heirship' rule. The Succession Regulation entered into force on 12 August last year, although most of it will not apply until 17 August 2015. There has been widespread criticism of this change in France, so it will be interesting to see if this is reflected in challenges in the courts in due course.

Charitable challenges

Although the incidence is much less than in the UK, charitable legacies do occur in France, but the charity in question must meet strict criteria set out in the Code Civil. If not, the gift will fail.

It is true that leaving legacies to charities has been made much easier, particularly donations to foreign charities, since the requirement for 'administrative authorisation' was lifted. This was a considerable administrative burden, in fact a painful process altogether, and consequently put a lot of people off bothering with charitable legacies. Before the legacy could be approved, i.e. while the testator was still alive, the Prefet (the State's representative in a department or region) had to give express authority.

Where the gift met the criteria set out in the Code Civil, the Prefet could only oppose the donation and ask the testator's relatives to agree to the donation. There might be a protracted negotiation with them before the Prefet would decide to go ahead and authorise the gift, and if he refused to give his authority, of course the testator might choose to take him to court. Unsurprisingly the French's appetite for charitable legacies has been small.

It will be interesting to see how the lifting of this administrative authorisation requirement makes a significant difference to the number of charitable legacies, or whether the other, eg cultural, limitations on French charitable giving will mean that little changes in practice.

Family feuds

The rise in divorce, co-habitation and increased provision for spouses is precipitating an increase in applications in the UK under the Inheritance Act. There is often great bitterness between the children of a first marriage and a second wife, or between a separated (but not divorced) wife and a co-habitant.

It is perhaps more surprising that there should have been an increase in wills-related litigation involving charities, although substantial bequests to charities might well be associated with family breakdowns and arguments, or the early stages of dementia.

Charities have also become much more vigorous about soliciting bequests. "I'm going to leave it to the cats' home" might perhaps be heard under the breath of many a rowing relative not known for his or her life-long affection for animals. If such a sentiment happens to coincide with the arrival on the doormat of an advertisement from a charity for a free or discounted will-writing service, it would not be surprising if a charity were to receive a more generous bequest than it might otherwise have done.

What individual parties find most surprising when faced with litigating against a charity is that charities will not simply roll over. UK beneficiaries are often unaware that trustees cannot simply relinquish a claim to an interest in an estate. Their duty as trustees is to maximise the charity's assets so that they can be applied for the express purposes of the charity. They have to take a fairly commercial and dispassionate view of litigation, quite apart from any subjective view that it is incumbent upon them to seek to uphold the wishes of those who have been generous towards them and share the same interests.

In France, the Préfet would very often grant authorisation to the charity with a condition, eg to give a determined sum of money to the relatives, especially if they were in need - a neat way to avoid the likelihood of a challenge to the legacy.

Disincentives to litigation

Charities also face fewer disincentives to litigate than individuals. In the UK, many individuals cannot afford to take the risk of being wiped out financially, even if the risk of losing is low, and resolving a dispute quickly may be more important to individuals.

The same does not apply to large charities. Litigation is not as personal or traumatic for them, and they may not be as motivated to use alternative dispute resolution, despite its advantages. Obtaining authority to compromise a dispute can sometimes be difficult in a large organisation, and those handling a dispute may even find it easier not to make a decision to compromise but to leave the outcome in the decision of the courts.

In France however, appellants may appeal as of right, (as opposed to having to seek leave to appeal), all the way up to the highest court (the Cour de Cassation). And of course with only one set of lawyers to pay (one avocat, rather than the duplication of solicitor and barrister in the UK), French legal fees are generally much lower - only 50-60 per cent of typical fees for such court challenges in the UK. For these reasons, in France a determined individual is not to '¨be underestimated.

There is sometimes a misconception that claims under the UK Inheritance Act are determined on the basis of weighing competing needs alone. Relatives may, erroneously, believe that it can be sufficient to show that they have a greater need for the money than the charitable beneficiary.

As the globe continues to shrink we can only expect to see more cross-jurisdictional challenges emerging, and in more and more of the marketplaces we serve as lawyers. Complex cross-border issues are no longer confined to the multi-nationals in the world of business, nor the very-high-net-worth individuals and families when it comes to private client work.

The issues affect more and more of our society and as lawyers we are being called to think beyond our own national boundaries more routinely.

The profession needs to appreciate this is happening and skill up.