If you ask: ‘Can I leave whatever I want to whoever I want in my Will?’ the presumed answer would be ‘well of course I can’.
While strictly the answer is ‘yes’ if you have testamentary capacity (with a few limited exceptions), there is a risk that discontented family members may say the Will does not give them ‘reasonable financial provision’, and ask the Court to order they be given a share, or bigger share, of the Estate.
The Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”) gives the Court the power to do that, and also applies to cases where is there is no Will (known as an ‘intestacy’).
Instead the Court will objectively assess what financial provision is made, and whether the provision made for the claimant is reasonable. The Court will not consider whether it is morally right to make an award.
If the Court considers the Will or intestacy not to make reasonable financial provision for the claimant then the Court will consider what financial provision would be reasonable, and it may then make an award to the claimant.
The key provisions of the 1975 Act are as follows:
Time Period for Bringing a 1975 Act Claim
Any claim must be brought within six months from the date of the Grant of Probate or Letters of Administration, although the Court can allow claims outside of that period where it considers there to be ‘exceptional circumstances’.
Who Can Bring a 1975 Act Claim?
Only those within a class of persons defined in Section 1 of the 1975 Act may make a claim. These are:
- the spouse or civil partner of the Deceased (or someone for a period of at least 2 years before death was living with the Deceased as if they were married or a civil partnership)
- a child of the Deceased (or someone who was treated as a child of the Deceased)
- and anyone who, immediately before the death of the Deceased, was being maintained, wholly or partly, by the Deceased.
Does the Will (or Intestacy) make ‘reasonable financial provision’?
This is the first question the Court will ask. This is considered objectively, and there are two alternative tests, one for the spouse or civil partnership of the deceased, and the other for anyone else:
- Spouse or civil partner: What would it be reasonable for the claimant to receive? The Court does not consider what is reasonable for that person’s ‘maintenance’. This is a very broad question, which case law has sought to give guidance on.
- All other claimants: Such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance. The word ‘maintenance’ is not defined in the 1975 Act, but the Courts have interpreted this to mean what it would be reasonable for the claimant to live on, to neither a luxurious nor an impoverished level.
If the answer to this first question is ‘no’…
What Provision to Award?
Only if the Court considers the Will or intestacy does not make reasonable financial provision, can it then consider what award to make.
In answering this question, the Court must consider all relevant factors set out in Section 3. These include:
- the financial resources and needs the Claimant has or will likely need in the foreseeable future;
- the financial resources and needs of other beneficiaries of the Estate;
- the size and nature of the Estate.
If the Court does decide to make an award, it can do so in a number of ways, including: a capital sum, payment of income periodically, deferred payments, or having a sum held by trust.
One scenario where this is a particular issue is that of charities who have received a bequest from an individual as part of their Will which is then contested by family members or dependents. Whilst the Will may have been executed correctly, and may be clear the Deceased wished to make the bequest, charities may find themselves in a difficult situation as they are legally obliged to pursue monies left to them as part of a legacy, where reasonable to do so. In this instance, charities are strongly advised to seek independent legal advice to ensure that they are proceeding in the correct manner and to work with the claimant to come to an agreement with regard to the legacy of the individual who has died.
It is daunting to an executor or administrator of an Estate when they receive a 1975 Act claim. The first step is to seek urgent legal advice from a solicitor.
Likewise, if you are a potential claimant then you must be aware of the 6-month limitation period for bringing such a claim from the date of Grant. Again, if you believe the Will or intestacy does not make reasonable financial provision for you, you must approach a solicitor promptly and in good time.
Claims under the 1975 Act are becoming increasingly common, so executors and administrators need to be aware of the potential for such claims to be made, and to know what to do if they are made.
Peter Knibbs will be hosting a Webinar with counsel Philip Jenkins of Ten Old Square Chambers, on 22 April to discuss how the 1975 Act applies to charities and factors they need to consider. Please click here for more information and to book a place at the event.
These notes have been prepared for the purpose of articles only. They should not be regarded as a substitute for taking legal advice.