The past few months have seen some interesting developments in the field of wills, tax and probate.

While there has been no significant new case law concerning wills since the last update (see [1993] Gazette, 23 June, 6) there have been other developments.The Law Commission has issued a paper entitled: 'The effect of divorce on wills', (HMSO, £4.90) proposing much needed reform.Under the present law, spouses are disentitled, on divorce, under the wills of the other party to the marriage.By s.18A of the Wills Act 1937 (as amended by the Administration of Justice Act 1982) where a marriage is dissolved or annulled by a court order, the will takes effect as if any appointment of the former spouse as executor/trustee were omitted.The section also stipulates that, on termination of marriage, any devise or bequest to the former spouse will 'lapse'.

If there is no substitutional gift, the property bequeathed to the former spouse will fall into residue or pass under the intestacy rules as appropriate.Unfortunately, in the decision in Re Sinclair (deceased), Lloyds Bank v Imperial Cancer Research Fund [1985] Ch 446 the Court of Appeal placed an unexpected interpretation on the provision.In this case, there was a gift to the Cancer Research Fund which was to take effect 'if my said wife should predecease me or fail to survive me for one month'.

The testator was divorced from his wife and hence the gift to her lapsed.

The testator died and his former wife survived him by a month.The Court of Appeal held the word 'lapse' meant 'fail' and the divorced beneficiary was not deemed to have predeceased the testator.

The unfortunate (and presumably unintended result) was that the gift to the Cancer Research Fund could not take effect.

As the residuary gift to the fund failed, the property devolved according to the intestacy rules.In light of this decision, anyone drafting a will where there is a gift to the other spouse should include the following clause: 'If the gift to my spouse shall fail for any reason...' so that the conditional gift would be operative.The commission report seeks to alleviate the unintended consequences of Re Sinclair by proposing that divorce should have the same effect on spouses' wills as death.

It also proposes that divorce should revoke the appointment of a former spouse as a guardian under the Children Act 1989 and as executor/trustee subject to any contrary intention indicated by the testator.The concept of the living will is becoming increasingly popular.

At the present time, there is no law which specifically deals with living wills and their legal status is unclear.Until a test case goes before the courts, it will remain so.

Nevertheless, a number of organisations have produced forms of such wills.A particularly interesting living will has been produced by the Terrence Higgins Trust of 52-54 Grays Inn Road, London WC1X 8JU.

The trust is a registered charity established to provide 'practical help, counselling and advice for anyone with or concerned about AIDS and HIV infection'.

The trust has a legal helpline, 071-405 2381, open between the hours of 7pm and 10pm every Wednesday.Its living will consists of declarations where the testator suffers from illnesses from which he or she is unlikely to recover, permanent mental impairment and permanent unconsciousness.

It directs that the testator should not be kept alive by artificial means in those situations .The Law Society has shown concern about the increasing number of unqualified will writers and used its third national 'make a will week' campaign to press for the introduction of regulations for unqualified will writers.

These individuals, who advertise extensively, are not normally competent in drafting wills or fully aware of the relevant tax implications.

Many do not have indemnity insurance.One case of interest was reported in The Times (30 June 1993) - Hemmens v Wilson Browne (a firm).

The case was not specifically concerned with wills but has implications for will draftsmen.The defendant firm of solicitors was instructed to draft a document whereby their client's mistress was to receive the present right to call, at an unspecified time in future, for a sum of £110,000 to enable her to purchase a house for herself and her daughter.Unfortunately, the document as drafted failed to give the mistress any enforceable rights in law.

Later, when the firm's client was called upon to give effect to the document he refused to do so.The mistress, as plaintiff in the action, claimed the £110,000 from the firm of solicitors alleging a breach of duty of care to her in preparation of the document.

The court considered such cases as Ross v Caunters [1980] Ch 297 and White v Jones [1993] The Times, 9 March.

These were concerned with wills rather than an inter vivos transaction.The court held that the firm did not owe a duty of care because, as their client was still alive, it remained within his power to remedy the situation.

He did not wish to because he had changed his mind.The reasoning behind the decision was that the matter could have been remedied had the client not changed his mind and, secondly, the client had a remedy against the solicitor for breach of contract and need not pay his legal bill or, if he had paid the defendant's legal fees, he could engage a different firm of solicitors to draft the document correctly and recover their charges for breach of contract against the defendants.The clear inference from the decision seems to be in line with Jones v White and other recent cases.

Had the instructing client been dead or otherwise unable to rectify the situation, the defendant firm would have been liable in negligence.In the course of the judgment, Judge Moseley QC considered that he would expect liability to arise if for any reason the situation was not remediable.It is possible that the circumstances in which a solicitor can be held liable for negligence in relation to the preparation of a will may have gone too far.

If a solicitor is to be so readily liable, he or she will have to spend a long time taking instructions to cover almost every conceivable relevant point.

If this happens the cost of preparing wills will increase dramatically - with the public footing the bill.Regarding probate, on 18 October the fees for administering oaths increased from £3.50 to £5 and the fee for each exhibit by £1 to £2 (see SI 93/2297).On 11 October, the Law Society indicated its intention to lobby for a change in law, in early 1994, to give beneficiaries under wills new rights to challenge the costs of solicitors in probate work.This move is part of a package of measures designed to reduce disagreement between solicitors and their clients about charges for non-court work.

Where disagreements do arise, the initiative looks to resolve them with speed and fairness to both sides.Beneficiaries, at present, only have a right to challenge the probate bills by taxation under s.71(3) of the Solicitors Act 1974 where there is a solicitor executor (s.1).

In future, subject to legislation, residuary beneficiaries will be able to contest professional fees for probate work where the solicitor is the executor by applying for a remuneration certificate from the Law Society.

In addition, the statutory legacies under the intestacy rules have been increased to £125,000 and £200,000 respectively .Sadly, Parliament does not seem minded to give effect to the Law Commission report (No.187) 'Family law - distribution on intestacy' of December 1989 in the immediate future - a much needed reforming document.On the tax front, corporate tax lawyers should not forget the corporation tax - pay and file system.

The Inland Revenue issued three statements of practice (SP9/93, SP10/93 and SP11/93) on 8 October 1993.

These dealt with the procedure under pay and file for making and amending corporation tax returns and claims for group relief.

They also refer to the circumstances under which late claims for capital allowances and group relief claims may be accepted.

The pay and file system applies to accounting periods ending on or after 1 October 1993.Inland Revenue leaflet IR69 has been issued and explains the position of expense payments to directors or those employees earning in excess of £8500.It is possible to avoid completing deductible expense form P11D, with the employee having to make a corresponding claim for relief if the employer obtains a dispensation from the inspector of taxes.

This may save administrative and compliance costs.