27 Feb Who can make a claim against your estate?
In the more complex area of Wills and Estate Planning that I work in, it’s quite common to come across clients who wish to ‘exclude’ certain family members from benefitting under their Will – which can be for a variety of reasons, and sometimes (allegedly!) already explained to – and agreed by – the excluded person…
Whether currently ‘agreed’ or not, the intended disinherited beneficiary’s situation may have changed substantially by the time of death, so I discuss in some detail the implications of them making a claim against the Will under the ‘Inheritance (Provision for Family and Dependents) Act 1975’ – “the Act”.
Although it is ultimately the client’s choice, and in the UK we are lucky to have the ‘testamentary freedom’ to leave our estate how and to whom we want to, the clients need to know the implications of their chosen course of action.
Eligible applicants under the Act
The Act makes provision for a court to alter the distribution of the deceased’s estate to benefit specific ‘eligible persons’ entitled under the Act to make a claim, in cases where the Will (or Rules of Intestacy where there is no Will) fails to make ‘reasonable financial provision’ for them – though the extent of the claim the court can consider is restricted.
Firstly, there are four conditions that must be met for a successful application under the Act:
- The deceased must have died domiciled in England or Wales
- The application must be made within six months of the grant of probate being taken out
- The applicant must fall into one of the six categories of applicant
- The deceased’s Will or intestacy must have failed to have made ‘reasonable financial provision’ for the applicant
The ‘six categories of applicant’ detailed at 3 above, are:
- A spouse or civil partner of the deceased
- A former spouse/civil partner if they have not subsequently remarried
- A person ‘living as’ a spouse or civil partner (for a minimum of 2 years immediately prior to death)
- A child of the deceased
- A child treated as a child of the family (including children of cohabitants of for whom the deceased was a guardian)
- A person maintained by the deceased wholly or partly, immediately before death
Financial provisions which could be claimed
The deceased’s Will or intestacy must have failed to have made ‘reasonable financial provision’ for the applicant – which falls into two different standards:
- the ‘surviving spouse standard’ – being; ‘such financial provision as it would be reasonable in all the circumstances of the case of a husband/wife (or civil partner) to receive, whether or not that provision is required for their maintenance’, and;
- the ‘maintenance standard’ – being; ‘such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for their maintenance’
Though the Act does not define ‘maintenance’, it is generally taken as being ‘payments which directly or indirectly enable the applicant in future to discharge the cost of their daily living at whatever standard of living is appropriate to them.’ It is generally the case that the court will not vary the disposition of an estate if the applicant has the means to suitably maintain themselves.
Making an application
When considering an application under the Act the court takes a two stage approach. In the first stage it must consider whether it is satisfied that the deceased’s Will or intestacy failed to make reasonable financial provision for the applicant. In the second stage, the court decides whether to make an order for reasonable provision for the relevant applicant, and decide in what manner the provision shall be made.
There are seven general guidelines that the courts must consider when deciding if reasonable financial provision has been made and, if necessary, whether to make an order and what provision should be made. Read more about this second stage.
To find out more about how I can help you, your family and friends, and add value to your client offering, please contact me via; firstname.lastname@example.org or call 0845 519 7585, and I will be happy to discuss things further.