Contested Probate

THE INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) ACT 1975

What is the Inheritance (Provision for Family and Dependants) Act 1975?

The Inheritance (Provision for Family and Dependants) Act 1975 (commonly referred to as the “Inheritance Act” or “1975 Act”) enables certain categories of people to apply to the Court and make a claim against a deceased person's estate, alleging that the deceased did not make reasonable financial provision for them.

The Inheritance Act makes provision for a court to alter the distribution of the estate of a deceased person to any spouse, former spouse, cohabitees, child, child of the family or dependant of that person where the will or the operation of the statutory rules which apply on intestacy fail to make reasonable provision for them.

There are four questions asked surrounding popular myths about the Inheritance

(Provision for Family and Dependants) Act 1975

1. Can anyone make a claim under the Inheritance (Provision for Family and Dependants) Act 1975?

Not just anyone can make a claim. They must fall within the scope of persons entitled to make a claim, as defined in the Act and includes:

  • the spouse or civil partner of the deceased

  • the former spouse or civil partner of the deceased (as long as that person has not remarried/entered into a subsequent civil partnership)

  • a person who, for the two years prior to the death, was living with the deceased as if they were a spouse or civil partner

  • a child of the deceased

  • a person who was treated as a child of the family by the deceased

  • any other person who was being maintained, wholly or partly, by the deceased immediately prior to their death.

 

A person is classed as being maintained by the deceased if they were financially supported by the deceased in some way during their lifetime and that maintenance continued until the death. This can include monetary maintenance in the form of regular payments or large gifts. Provision of housing can also be maintenance, such as the deceased allowing the claimant to live in their property either rent free or at a nominal or reduced rent.

Cases in recent years have involved growing numbers of adult children bringing claims under the Act and although it is certainly easier for a child under the age of 18 to prove they were financially dependent on the Deceased and/or that the Deceased has a moral obligation to provide for them, significant awards can and have been made to independent – even estranged - adult children.

 

2. Will any claim made under the Inheritance (Provision for Family and Dependants) Act 1975 disregard the beneficiaries chosen by the will-maker?

The court takes into consideration various factors when considering a claim, including the financial needs of the beneficiaries named in the deceased’s will, both currently and in the future. Those beneficiaries will be made parties to the claim and as such, they will be entitled to place evidence before the court in both witness statement and document form. In doing so, the court can carry out a ‘balancing exercise’ of the needs of beneficiaries and the claim which is being made against the background of the extent of the deceased’s estate.

In circumstances where one of the named beneficiaries is a charity, the opportunity should be taken to explain to the court the needs of the charity, e.g. how much per year it needs to provide its services and whether the deceased was a known donor and as a result the monies due from the estate have already been factored into projects or forecasted spending.

3. What does ‘reasonable financial provision’ mean in the Inheritance (Provision for Family and Dependants) Act 1975?

The extent of ‘reasonable financial provision’ has been the subject of much debate over the years. The Supreme Court in Ilott (Respondent) v The Blue Cross and others (Appellants) [2017] UKSC 17 explored the issue and it is accepted that there is a balance to be struck with obtaining enough provision for day to day maintenance while not providing what, to the independent bystander, could be seen as a luxury. For example, new carpets and white goods are likely to fall within the first category, while exotic holidays will almost certainly fall in the latter.

There is, however, always the value of the estate and any liabilities to be considered. There will be a finite amount from which all liabilities, claims and beneficiaries must be paid and because of that the court will be careful to strike a balance.

4. Will the costs of making a claim under the Inheritance (Provision for Family and Dependants) Act 1975 be paid from the deceased’s estate?

One of the most common misconceptions, of both potential claimants and sometimes even practitioners, is that the costs of bringing a claim under the Act will be paid from the estate. This is not the case. Costs follow the usual rule in that costs follow the event and those costs are at the discretion of the court.

In practice, this means that the starting position is that the losing party will have to pay the winning party’s costs. The court may then exercise its discretion and order that costs are paid from the estate. But it should be said that any claimant would be unwise to commence a claim assuming that this would be the outcome. If a settlement is agreed between the parties, the treatment of the parties’ costs will also be subject to agreement.

What will the Court consider?

The Court will consider three questions:

  • Does the Will or intestacy make reasonable financial provision for the applicant?

  • If not, should the Court intervene so as to award further provision from the estate?

  • If so, what type of provision is appropriate?

How do I make a claim under the Inheritance (Provision for Family and Dependants) Act 1975

There are various things to consider before making a claim under the Act, including:

  • Make sure that you are an eligible person as set out in the Act before embarking on a claim under the Act.

  • Be sure to know the extent of the provision you might be able to secure.

  • Claims under the Act rely on a witness statement being issued with a claim form and it is essential to make that as comprehensive as possible. This can take some time to prepare and therefore issuing a claim should be well in advance of any potential deadline.

  • Be ready to set out all your income and outgoings and provide evidence of those.

 

Claims under the Act utilise a court procedure which is only used in limited circumstances. There are also specific Civil Procedure Rules which apply to claims under the Act and because of that, to put you in the best possible position, you may wish to consult one of our specialist contested probate solicitors who will be able to guide you through the process.

Take legal advice early

 

If you think that you might have a claim, taking early advice and ensuring you know when a grant issues in the relevant estate, are both absolutely crucial. A claimant must issue a claim within 6 months of the date of a grant of probate or grant of letters of administration. In exceptional circumstances, the court may permit claims brought after this time, however, there is no guarantee that late claims will be allowed to proceed, and the claimant must produce persuasive evidence to explain their delay and demonstrate the strength of their claim to have the best chance of securing leave out of time.

Be ready to provide information about your finances

 

A claimant will be expected at a very early stage to provide full disclosure as to their own financial needs and resources. This is necessary so that the estate and the court has a clear picture of what you have and what you need now and in the foreseeable future. It is not uncommon for those who feel that they have been treated unfairly by a loved one in their will and advance a claim for provision, to regard this disclosure requirement as intrusive, and to feel as if it is they who are somehow on trial. However, the reality is that the burden of showing that reasonable provision has not been made falls on the applicant. Without this information, the estate – and the court – will not be able to form a view about what reasonable provision might be if it is accepted that the will failed in this respect. Those defending a claim, who are often the beneficiaries of the estate, are not required to provide disclosure of their financial needs and resources, although that which they are left by virtue of the will or intestacy rules will be known once a grant of probate is extracted and the executor provides information about the estate as they must in their neutral capacity in any claim. If a Defendant chooses not to disclose any information about their finances, the inference is likely to be drawn that they are well provided for and cannot mount a needs-based defence.

What can the Court do?

The Court’s powers are very wide and it has numerous options available when making an order.  The Court may award that a specific lump sum be paid to the applicant, either for a particular purchase or for general use.  Alternatively the Court can order that small amounts be paid regularly to the applicant, in the form of periodic payments for their maintenance. If the parties are arguing over a specific property, the Court may order that it be sold and the proceeds split, or that it be transferred to one of the parties outright. The Court may also declare that any property be held on trust for the applicant and/or the other beneficiaries.