Inheritance Act Claims - How does it affect your family?

It is a principle of English law that a person may give his property during his lifetime or on his death to any person of his choice.

However, various statutes have encroached on this freedom and the present law is enshrined in the Inheritance (Provision for Family and Dependants) Act 1975.  This allows certain persons to apply for a provision from the estate following a death if they can show that the effect of the Will or intestacy (where there is no valid Will) is not such as to make reasonable financial provision for them.

The 1975 Act only applies if the person died domiciled in England and Wales (this is one country for the law of domicile).

There are six categories of people who can make a claim but being entitled to make a claim  is very different from being successful.  The categories are:

• the wife, husband or civil partner of the deceased
• a former wife, husband or civil partner of the deceased who has not remarried or registered a new civil partnership
• any other person who during the whole of the period of two years immediately before the death was living in the same household as the deceased as his/her wife, husband or civil partner
• a child of the deceased
• any person who, in the case of any marriage of the deceased, was treated by the deceased as a child of the family in relation to that marriage
• any other person who immediately before the death was being maintained by the deceased

In the case of a divorce or judicial separation a Court may have excluded the rights of the parties to apply for an order under the 1975 Act.

There is only one ground for a claim, namely that under the terms of the Will or the intestacy rules the deceased did not make reasonable financial provision for the applicant.

There are two standards for judging "reasonable financial provision" which depends on the status of the applicant.  For applications by spouses or civil partners (unless there was a judicial separation in force) the test is reasonableness in all the circumstances even if maintenance is not needed, whereas for applications by others it is dependent on the need for maintenance.

The 1975 Act sets out guidelines for the Court in determining whether there is reasonable financial provision.   These include the present and future financial needs and resources of any applicant and any beneficiary of the estate, any obligations and responsibilities of the deceased towards any applicant and any beneficiary, the size and nature of the net estate, any physical or mental disability of any applicant or beneficiary, and any other matter (including the conduct of the applicant or any other person) which in the circumstances of the case the Court may consider relevant. For this reason, if a testator is considering excluding a close relative from his Will it is often advisable to give an explanation either in the Will itself or in a separate note.

There is a time limit of six months from the date of Grant of Probate or Letters of Administration although there is power for the Court to extend the time limit.

In the past, applications by adult children of the deceased have tended to be unsuccessful although there has in recent years been a rise in the number of such applications where the Court has varied the terms of the Will in favour of an adult child.

The Court can order periodical payments from the estate for any period of time, a lump sum payment or transfer of property or the establishment of a trust such as enabling a surviving spouse to occupy a house for the remainder of his or her life.

This article is restricted to claims under the 1975 Act.  There are other methods of challenging the effect of a Will such as proprietary estoppel or undue influence on which Michelmores can advise.

Chris Butcher, Partner
chris.butcher@michelmores.com

Chris Butcher is a joint author of Probate Practice Manual published by Thomson Sweet & Maxwell