How the court decides what is ‘reasonable financial provision’ under a Will claim

05 Jun How the court decides what is ‘reasonable financial provision’ under a Will claim

In my February blog, I outlined ‘who can make a claim against your estate’ under the Inheritance (Provision for Family & Dependants) Act 1975 – “the Act”.

This article tackles the second stage the court undertakes when dealing with these claims: deciding what a ‘reasonable financial provision’ will be for the relevant applicant.

Once the court decides that ‘reasonable financial provision’ was not made for the applicant in the deceased’s Will, they will then quantify the provision to be made for them – with reference to either the ‘surviving spouse’ or ‘maintenance’ standard – and decide in what manner the provision shall be made.

Seven points the court will consider

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.

These are:

1. the financial resources and financial needs which the applicant making the claim has, or is likely to have, in the foreseeable future;
2. the financial resources and financial needs of any other applicant making a claim under the Act has, or is likely to have, in the foreseeable future;
3. the financial resources and financial needs which any beneficiary of the deceased’s estate, under the Will or Intestacy, has or is likely to have in the foreseeable future;
4. any obligations and responsibilities which the deceased had towards any applicant making a claim, or towards any beneficiary of the deceased’s estate;
5. the size and nature of the net estate of the deceased;
6. any physical or mental disability of any applicant making a claim, or any beneficiary of the deceased’s estate;
7. any other matter, including the conduct of the applicant making the claim, or any other person, which in the circumstances of the case, the court may consider relevant.

Spouses or civil partners

Where the applicant is a spouse or civil partner, the courts will also consider the age of the applicant, the duration of the marriage or civil partnership, any financial and other contributions made by the applicant for the welfare of the family, and any provision the applicant may have reasonably expected to receive if, on the day the deceased died. the marriage or civil partnership had instead ended by a decree of divorce or dissolution. Aside from the last point, the same guidelines apply to a former spouse or civil partner who has not remarried, potentially even in the event of a ‘clean break’ divorce.

For a person living as the spouse or civil partner of the deceased, the courts will consider the age of the applicant, the length of time that they lived in the same household as the ‘spouse or civil partner’ of the deceased, and the contributions the applicant has made to the welfare of the family of the deceased.

Children and other dependents

For a child. the courts will consider the manner in which they were being, or would be expected to be, trained or educated. This will also be considered for a person ‘treated as a child of the deceased’, but they will also consider what extent the deceased assumed responsibility for the applicant’s maintenance, whether they did so while knowing they weren’t their own child, and the liability of any other person to maintain the applicant.

For a person maintained by the deceased, the courts will consider the length of time for which the deceased maintained the applicant, the contributions made by way of maintenance, and to what extent the deceased assumed responsibility for the maintenance of the applicant.

Impacts of the court’s decision

The orders the court can make are all against the net estate, which includes all property which the deceased had a power to dispose of by Will (after payments of taxes, debts, liabilities and funeral expenses).  This also includes any money or property received by any person from the deceased as a ‘deathbed gift’, but not any property nominated under a pension fund trust deed or proceeds from an assurance policy on the deceased’s life, if they are payable directly to a beneficiary.

The court may also order for the deceased’s “severable” share of any jointly owned property to be included in the deceased’s net estate, and make an order against any person who has received benefit from the deceased either by a lifetime gift, or a contract to provide money or property.  For that person to defeat such an order, they must prove – if the transaction was made within 6 years of death – that it was not made for less than full consideration, and was not made by the deceased in an attempt to defeat a claim under the Act.

Successfully excluding individuals from your Will

When advising a client who wishes to exclude someone from benefiting under their Will, my role is to ensure they are appropriately advised on whether the excluded person would be able to bring a claim against their estate, and if so, what steps should be taken to attempt to protect against such a claim.

An exclusion clause making it clear that the deceased intended to exclude the person must be included in the Will, and I also draft an ‘Expression of Wishes Letter’, or a specific ‘Exclusion Letter’, for them to fully explain to their Executors their reasons for making the exclusion.

Whilst I can’t give specific advice on whether a beneficiary’s claim would be likely to be successful, giving them a good understanding of how these claims are assessed and the dangers of excluding someone is essential.

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; info@heir-tight-wills.co.uk or call 0845 519 7585, and I will be happy to discuss things further.