Where there’s a will…

By Brenda Shaw, wills and probate lawyer

Are you aware that any person who can show that they were dependent on you at the time of your death has a right to make a claim against your estate whether or not you have made a Will?

Under the Inheritance (Provision for Family and Dependants) Act 1975 (as amended), the people eligible to make such a claim fall into six categories. These are:-

  • The wife or husband of the deceased;
  • A former wife or husband of the deceased who has not yet remarried;
  • A child of the deceased, which includes illegitimate, legitimated (by subsequent marriage of the parents) and adopted children;
  • A person treated as a child of the deceased;
  • Any person maintained by the deceased immediately before death;
  • For deaths after January 1st 1996, a new category has been added to include co-habitees who have, for a period of 2 years prior to the date of death, lived in the same household as the deceased and as husband and wife.

 

The conditions for the application are that the applicant must show they fall within one of these categories, that the application is made within 6 months of the date of the grant of probate/ letters of administration, that the deceased was domiciled in England and Wales and the applicant must show to the court’s satisfaction that the will or intestacy does not make reasonable financial provision for the applicant.

Therefore, when considering your Will, you must ensure that you think carefully about the people who rely on you financially. A claim against your estate by someone you have left out of your Will could mean a delay in paying your beneficiaries and, if the personal representatives challenge the claim, the costs of the action could be taken out of the estate, thereby leaving your chosen beneficiaries with less than expected.

When the court considers an application, there is a two-stage process. It firstly looks to see if the will or intestacy makes reasonable financial provision for the applicant. If it finds that reasonable financial provision has been made, the case ends. If the court decides that the applicant has not received reasonable financial provision, then it must determine what would be reasonable in all the circumstances.

The court would have to take into account the following guidelines in all cases:-

  • The financial needs of the applicant and others having a claim on the estate. It would look at such matters as earning capacity, capital and any state benefits to which these people were entitled;
  • The moral obligation to all those having a claim on the estate;
  • The size and nature of the assets in the estate. If the estate is relatively small with a number of beneficiaries and claimants, the court will only have limited power to make financial orders;
  • Any mental and/or physical disability of any of the claimants;
  • Any other matter such as a statement by the deceased explaining is reasons for excluding a potential claimant.

 

In addition, in a case of a spouse (or a former spouse divorced within the year preceding the death), the court has to consider such things as the age of the applicant, the length of the marriage and what provision the applicant would have received if the couple had divorced instead of one of them dying.

Once it has been decided that the applicant has not received reasonable financial provision under the will or intestacy, the court has to decide what would be so, and two different standards are applied, namely the standard if the applicant is a surviving spouse and the standard in all other cases.

The surviving spouse does not have to show that the money is required for his/her maintenance and is similar to what that person would expect to receive in a divorce situation. The court can also decide to use this standard in cases where there has been a Judicial Separation or a divorce in the last year where the financial matters have not been finalised. In every other case the applicant must show what amount he/she requires for his/her maintenance.

In the case of a co-habiting couple, the court considers the age of the applicant, the period the applicant and the deceased lived together as husband and wife in the same house and any other contribution the applicant made to the family such as looking after children and the home. It has been decided by the courts that this category does not extend to same sex couples who may then have to rely on the category of being maintained by the deceased immediately before death.

One particularly problematic area is with children. Some families have rifts and this can lead to parents wanting to exclude a child or children from their will. This can be done, of course, as everyone is free under English Law to dispose of their assets as they want. However, if this is the case, it is advisable to make it clear to your solicitor why you are excluding a particular person so that notes can be made on your file, and also a statement can be put with your Will, and reference made to such statement in your Will, explaining the reasons for your decision. This will not prevent that person being able to make a claim on your estate, but it can be taken into account by the court when considering the facts of the case. However, the statement should be carefully worded as the court will not hear any malicious or mistaken statements.

It has also been established by case law that the court takes a fairly dim view of claims made by adult able-bodied children. For a child of the deceased to make a successful claim he/she needs to prove that the deceased maintained him/her financially and, if still being supported by the deceased, the court would also look at the manner in which that child could expect to be educated or trained. The courts have held that the applicant need not show that the deceased had a moral obligation towards them but an adult child in full time employment would still have a difficult task to convince a judge that he had a valid claim against the estate.

When making an order, the court has wide powers to order lump sum payment, periodic payments, a variation of a settlement made in a will and even for property to be purchased on behalf of an applicant. It can also set aside contracts and gifts made by the deceased during his lifetime if it believes such contracts or gifts were made to reduce the value of the deceased’s estate in order to avoid a claim being made against his estate.

This is a very simplified version of the law in this area, and each case is taken on its own particular set of facts. However, the conclusion is clear. When making a will you should consider who your dependants are and make reasonable financial provision for them. If you decide not to do so, then leave a clear statement as to why. In any event, such a person would still have the right to make a claim. If you have not made a will, consider if there are any people, such as a co-habitee or an elderly relative living with you, who would not inherit under your estate under the intestacy rules. They would then have to rely on the Inheritance (Provision for Family and Dependants) Act 1975 to be able to claim your assets. Would you really want them to have to pursue this with the expense and time a court action could involve? The answer is obvious- you should make a clear unambiguous will and update it regularly as your situation changes.