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No-one expects a 1975 Act claim......

As a common law jurisdiction the UK makes much of our testamentary freedom – the ability to leave our assets to anyone we wish, from our nearest and dearest to the Cat’s Home.

We are not restricted by “forced heirship” rules which apply in many civil law jurisdictions and require a testator to leave specified shares of their estate to their surviving spouse/civil partner and offspring no matter how much the testator disliked them or how undeserving the statutory beneficiaries may be!

As private wealth lawyers, our job is to encourage our clients to make wills including express provisions about the devolution of their assets after death. Mainly to ensure the provision for and protection of those they love (whether they are related or not) and to ensure tax efficiency, but also to avoid the application of statutory intestacy rules which apply in the absence of a valid will. The intestacy rules do not always reflect a person’s wishes. For example, a wealthy married couple with children might expect the whole estate to pass to the surviving spouse, but in fact half of the estate over £270,000 gets split immediately between the children. Also, the intestacy rules do not make any provision for the survivor of a cohabiting couple where they were not married or in a civil partnership.

However we must always advise our clients that a will is not inviolable. Sometimes disgruntled beneficiaries will seek to challenge a will on the grounds of lack of mental capacity, undue influence or simply failing to comply with the formal requirements (two adult independent witnesses who must, in sight of each other and the testator, watch the testator sign the will and then in the sight of the testator and each other, then apply their own signatures as witnesses – not always easy during COVID). The success of a challenge will obviously depend on the specific circumstances. In addition, a claim can be brought against the estate under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act).

In summary, the 1975 Act enables the Court to vary the distribution of a deceased’s estate, in favour of certain family members and dependants who have been left out of a will entirely; or who have been left less than they require. The 1975 Act can also apply where there has been an intestacy. Two recent decisions demonstrate its application in two sets of very different circumstances, and demonstrate that there is no disparity in treatment whatever the levels of wealth within the estate.

In the first case (Estate of R Deceased, Re (Rev 1) [2021] EWHC 936 (Ch) (16 April 2021)), a former spouse brought a claim against the modest estate of her ex husband who had made a will which only benefitted his current partner and his parents. The former spouse had long remarried and had discontinued the child maintenance order for their two minor children (with whom the deceased had lost contact). The deceased indeed expressly provided that he did not want his children to benefit from his modest estate as he had no longer had any communication or interaction with them and did not believe they needed any financial support from him.

An important point is that the 1975 Act only looks objectively at whether the will failed to make reasonable financial provision for the claimant in all the circumstances, depending on the category of statutory claim her or she is eligible to make. As a result, despite the fact that the children were being provided for by their mother and step-father, Master Teverson in the England and Wales High Court (EWHC) ruled that the deceased’s will did fail to make ‘reasonable financial provision’ for his children, by excluding them from any benefit out of his net estate in circumstances where no other form of provision had been made for them. In short, the Court required some provision from the estate for the minor children, despite the fact that they were left nothing under the Will.

The second case (Miles v Shearer, [2021] EWHC 1000 (Ch)) involved a significantly larger estate, and a claim by two adult (fully capable) children. However in the well-known case of Ilott v Mitson, the Court of Appeal held that a claim by an adult child should be assessed like any other claim, by considering fully and properly all the relevant factors under section 3 of the 1975 Act. The statutory framework involves two questions:

(1) has there been a failure to make reasonable financial provision; and, if so,

(2) what order ought to be made?

The 1975 Act provides that reasonable financial provision is what it is "reasonable for [the applicant] to receive". In this instance, for maintenance. The Judge observed: “Although all cases under the 1975 Act turn on their own facts, it is of significance that, in cases other than those of spouses or civil partners, reasonable financial provision is limited to such provision as it would be reasonable for the applicant to receive for maintenance”. In Ilott it was noted that although the concept of maintenance is broad, “it cannot extend to any or everything which it would be desirable for the claimant to have. It must import provision to meet the everyday expenses of living.”

The judge therefore dismissed the claims of the adult daughters.

It is difficult to draw out a moral from these “stories” – since the test inherently involves objectivity. The important lesson is that all testators should be aware of the possibility of such applications. And if a testator has family or financial dependants, it is prudent to discuss whether or not to completely exclude them to avoid the risk of a person launching a 1975 Act claim.

These notes do not contain or constitute legal advice, and no reliance should be placed on them. If you have any questions, or would like to discuss any issues raised in this article further, please speak to your usual contact at Maurice Turnor Gardner LLP or email us at info@mtgllp.com.

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