Generally speaking, testamentary freedom is thought to be a foundational principle of English law relating to the distribution of one’s estate once they have passed. However, it is important to be aware of a notable exception to this idea: the court’s jurisdiction under the Inheritance (Provision for Family and Dependants) Act 1975.
The Act dictates that where the deceased’s will, or the rules relating to intestacy (or a combination of both) are not such as to make “reasonable financial provision” for the applicant, the court may make an order under s.2. This may require the payment of a sum or transfer of property to the successful applicant.
However, not everyone can make such an application. Broadly speaking, the Act limits the classes of person who are permitted to bring a claim to immediate family members.
While a spouse or civil partner, or a former spouse or civil partner (but not one who has subsequently remarried or reformed a partnership) may bring a claim, the same is true of any child of the deceased (or someone treated by the deceased as so). On top of this, any person who was being maintained by the deceased immediately before their death may apply to court for an order.
The approach that the court will follow when it decides a claim brought under the Act was set out in Re Coventry in 1980. It involves conducting a two-stage process:
- First, the court will ask whether the way in which the estate is disposed of fails to make reasonable financial provision for the applicant; and
- If so, whether any, and if so what, provision should be made.
The courts have however pointed out that there is a large degree of overlap between these two issues in practice. The central question to keep in mind is the level of provision it would be reasonable for the applicant to receive.
Reasonable Financial Provision
But what is “reasonable financial provision”? It is important here to consider the category of applicant under consideration. This is because where the applicant is the spouse or civil partner of the deceased, s.1(2) states that “reasonable financial provision” refers to such provision as it would be “reasonable in all the circumstances of the case for a husband or wife to receive”. For all other applicants, the standard that financial provision must meet is that it is reasonable in the circumstances for the applicant’s maintenance.
In other words, the court will make an award to a spouse if the will does not provide for them reasonably. However, for other applicants, the court is not required to step in even where the provision it leaves is ‘unreasonable’. It must be such that the applicant does not have the resources to maintain themselves.
It is crucial to make this distinction when considering any claim: surviving spouses and civil partners enjoy a much higher standard deemed to constitute reasonable financial provision. These applicants are therefore handed a significant advantage in persuading the court to exercise its jurisdiction under the Act.
Section 3 Criteria
The Act provides a list of factors that the court will take into account in deciding both whether the will has made reasonable financial provision and, if it hasn’t, what provision to make. Interestingly, the list is left open-ended, so the court can take into account any matter which it considers may be relevant in the circumstances. S.3 does however list several factors which the court must consider – so when evaluating any prospective claim, it is important to assess their effect.
The factors to which the court will have regard include the financial resources and needs of the applicant, but also those of other applicants under the Act and any beneficiary of the deceased’s estate. The court must also consider, if relevant, any responsibilities the deceased had towards any applicant and any physical or mental disabilities that any of the relevant parties may have.
When the Court is evaluating whether sums ought to be paid to different parties, it will be mindful of the size and nature of the net estate. The court may often be performing a delicate balancing act between a host of parties, with a limited pool of assets to be distributed. This unenviable task is made no easier by a lack of guidance as to the relative weight of the s.3 criteria. Indeed, the Court said in Ilott v Mitson that there has been a “struggle to articulate” how the “value judgment” as to relative importance is to be approached. What this means is that it is not always easy to predict how the courts will weigh up all the relevant factors in any case.
Examples of claims
An illustration of the court’s generous approach to claims from spouses and civil partners can be found in P v G, P and P. The deceased’s estate was valued at £4.5-5 million. Despite the widow being entitled to a valuable pension, paying her a net £90,000 per annum, the Court made an award of £2 million, reflecting the fact that the applicant had previously enjoyed a luxurious standard of living over the course of her marriage to the deceased. It might be thought of as curious that the court can be called on to sustain a spouse’s extravagant lifestyle. Influential to this approach is s.3(2) of the Act, which states that the court should consider what a spouse might reasonably have expected to receive if, on the day of the deceased’s death, a divorce had taken place instead.
The contrast between such claims and those of adult children is stark. The recent case of Miles v Shearer, reported in 2021, underlines the distinction. The father, who died in 2017, had told each applicant (his children) that they would receive no further financial assistance from him following a substantial gift in 2008. The claims were refused: the father was held to have no responsibilities towards the claimants at his death, and the claimants could not demonstrate needs for maintenance which they could not meet.
Indeed, the maintenance standard presents a significant hurdle for these claimants. If they are capable of maintaining themselves, and don’t have any financial struggles which require intervention, these claimants will find it very difficult to persuade the court to make an award under the Act. Ilott suggests that even if the court does make such an award, it is likely to be very low in value.
The Inheritance Act 1975 may seem an anachronistic piece of legislation. Indeed, many would be surprised to learn that the deceased’s wishes as to the distribution of their property is not the end of the matter. Even where the deceased makes an explicit statement in their will explaining their wish not to leave provision for any particular person who might expect to benefit, the court’s jurisdiction under the Act cannot be ousted. This means that if you feel that a will has not provided for you sufficiently, you should always consider the possibility that you may have a claim under the Inheritance Act.
Any prospective claimants should note that any claim under the Act must be issued within six months from the date of any grant of representation to the estate.
If you would like any more information or advice on whether you are entitled to make a claim, please do not hesitate to contact one of our contested probate specialists.