News

Testamentary freedom?

  • July 17, 2011 test
  • By Hunters Law

In contrast to many of our European neighbours, England and Wales impose no legislative restrictions on the way we leave our property and possessions on death. There has however been a growing number of claims in recent years under the Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”) by those disappointed with the amount of the provision or the lack of provision for them after a person’s death.

Such claims challenge the will (or, in the absence of a will, the intestacy) on the grounds that the deceased’s estate failed to make reasonable financial provision for the applicant. Effectively, the Act gives the Court the power to make provision or improved provision for a disappointed applicant who has been overlooked or under-provided for by the will or intestacy, if the Court considers it reasonable in all the circumstances to do so.

A claim can only be made by categories of individuals specified in the Act: these include spouses/civil partners, former spouses/civil partners, children, stepchildren, co-habitees and anyone who was “maintained” by the deceased immediately before death. The deceased must also have died domiciled in England and Wales. When considering the claim, the Court will have regard to whether the deceased’s estate has made reasonable financial provision for the applicant and, if not, what that reasonable financial provision should be. In carrying out this exercise the Court will consider various factors such as the size and nature of the estate, the financial needs and resources of the applicant, the financial needs and resources of the beneficiaries, and any other matter which in the circumstances the Court considers relevant.

The way in which the Court deals with such applications in part depends upon the category the applicant falls within. Surviving spouses/civil partners are entitled to such provision as is reasonable in all the circumstances, whether or not such provision is necessary for their maintenance.

One factor the Court will have regard to in Testamentary freedom? In contrast to many of our European neighbours, England and Wales impose no legislative restrictions on the way we leave our property and possessions on death. There has however been a growing number of claims in recent years under the Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”) by those disappointed with the amount of the provision or the lack of provision for them after a person’s death.

David Draisey Associate in our Litigation Department this category is the provision the applicant might reasonably have expected to receive if the marriage had ended as a result of divorce rather than death. There is no requirement to show that the marriage was a happy one for a claim to be successful. Any other categories of applicant are only entitled to such provision as is necessary for their maintenance.

There has been an increasing number of claims by adult children under the Act. In such claims the Court will need to carry out a balancing act between the various factors mentioned above, and in doing so may pay attention to significant social and economic changes suffered by the applicant, such as difficulty in finding employment.

These cases can be stressful, with feelings running high, but sometimes they can be resolved by alternative dispute resolution, such as mediation, which may avoid the need to go to Court.

If a claim does come before the Court and is successful, the Court can structure an award to the applicant in a number of different ways including, for instance, the provision of a lump sum; periodic payments; transfer of property; or variation of a marriage settlement. It is not possible for a testator to exclude the Court’s jurisdiction under the Act in a will. It is however possible to include a provision in the will directing that should a beneficiary make a claim under the Act then they will forfeit any financial provision made for them in the will. Such a condition will be upheld only if it is drafted with sufficient certainty.

Claims of this nature have become increasingly common, fuelled perhaps by increased property values which have swelled the size of estates. Disappointed applicants are also increasingly willing to challenge the deceased’s testamentary intentions in the context of the economic downturn and an increased awareness of the remedies available under the Act. We now see cases being funded under conditional fee agreements in suitable cases, supported by adverse costs insurance.

Hunters have extensive experience of dealing with all aspects of such claims whether acting for claimant or defendant or for the personal representatives of an affected estate. If you would like any advice on these matters please contact Richard O’Halloran of our Litigation Department.

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