July 2010
Wills and Estate Planning
It was traditionally regarded that an individual could have complete testamentary freedom in deciding who should (or should not!) inherit under a Will as applying in England and Wales. However, since 1975, such freedom has been eroded by the Inheritance (Provision for Family and Dependants) Act 1975.
To some extent the passing of the 1975 Act reflected a number of landmark judgments, (made by Lord Denning in the Court of Appeal), over the previous decade –notably the legal rights of spouses who had given up a working career to support a family.
Essentially the 1975 Act gives the court limited powers to order financial provision from the net estate of the deceased.
For an application to be successful four conditions must be met:
- the deceased died domiciled in England & Wales
- the application is within a time limit
- the applicant is one within six potential categories
- the Will (or intestacy) did not make “reasonable provision” for the applicant
Time Limits
- Six months from the date of general grant of Administration to executors or the administrators (on intestacy).
Who can apply?
- Deceased’s spouse or civil partner who must demonstrate marriage or civil partnership subsisted at the deceased’s death.
- Former spouse or civil partner who has not re married. The Act provides that former spouse or civil partners may be barred by applying for financial provision by a Court Order made with consent of both parties.
- A person living as the husband /wife or civil partner of the deceased: this followed the Law Reform (succession) Act 1995.
- The provision is that for two years ended immediately before the deceased died, the person was living in the same household as the deceased, as the husband /wife or civil partner. A crucial requirement –parties are living together as husband and wife or civil partners -a “commitment to permanence.”
- A child of the family -will include illegitimate, legitimated or adopted child –this limb is extended to include a person treated as a child of the family in connection with a marriage or civil partnership. (It should be noted that claims brought by adult able bodied children, merely on the grounds of limited means, are unlikely to be successful).
- Others: any person, who immediately before the death of the deceased, was being maintained wholly or partly by the deceased. The test being “a substantial contribution in money or money’s worth towards the reasonable needs of that person. The latter is a subjective assessment
What can the Court award?
The 1975 Act sets out two standards –the first applying to a surviving spouse, or civil partner, the second in all other case.
Surviving spouse standard
The test is “reasonable financial provision” as would be reasonable for a husband/wife or civil partner to receive whether or not provision is required for his/her maintenance. Readers will probably recall recent high profile cases in relation to one party to a marriage being comparably wealthy than the (claimant) spouse: how long the marriage subsisted etc; what was the contribution of one spouse to the financial “success” of the other spouse?
The ordinary standard
In all other cases “reasonable provision” is defined as financial provision as would be reasonable in all the circumstances (of a particular case) for the applicant to maintain himself appropriate to those circumstances as maintenance. Again this a subjective assessment – what would a “reasonable amount,” to a person previously used to “comfortable” living, would be different standard to a person used to “getting by” on a tight budget.
The Court has to decide, as objectively as possible, whether the provision made for the applicant is reasonable, in all the circumstances, including circumstances not known to the testator.
The Court will consider any reasons expressed by the testator, either in the Will or outside it explaining why any particular provision was (or was not) made. For those (wealthy) testators, determined that a particular individual should receive little benefit: the Will can be the “final chapter”-the testator having the last word!
However, many testators are unaware that the Will - following probate becomes a public document and ready meat for the tabloid press!
Andrew Murdoch
(ACIB, AIFP, Dip PFS, TEP, Solicitor)
The content of this article is only intended as information and should not be considered as legal advice. Andrew Murdoch cannot be held liable for any loss caused by any act or omission as a result of information in this article.
