A guide to the Inheritance Act

The Inheritance (Provision for Family and Dependants) Act 1975

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Introduction

This document provides general guidance regarding some of the key issues in bringing or defending a claim under the Inheritance (Provision for Family and Dependants) Act 1975.

Introduction

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

The Inheritance (Provision for Family and Dependants) Act 1975 (commonly known as “the 1975 Act” or “Inheritance 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. These are commonly called family provision claims. Claims can be made whether the deceased left a Will or where they died intestate (i.e. where they did not make a Will and so their estate is distributed in line with the intestacy rules).

The starting position in England and Wales is that individuals have freedom to leave their estate to whoever they wish. This is unlike the position in many jurisdictions where forced heirship rules dictate to whom an individual’s estate will pass on their death. However, testamentary freedom in this jurisdiction is subject to statutory intervention from the 1975 Act.

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

3. Domicile of the deceased

4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim?

6. What are the questions the Court will consider? 7. Specific applicants 8. What powers does the Court have? 9. Alternative Dispute Resolution

Funding

Conclusion

1. Introduction

Domicile of the deceased

In order to bring a claim under the 1975 Act the deceased must have been domiciled in England and Wales when they died. If the deceased was born and lived in England and Wales for their entire life this should be straightforward. However, if the deceased was born outside the UK or lived outside the UK at any time, there could be a question over their domicile, which may require specialist advice.

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

3. Domicile of the deceased

4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim?

6. What are the questions the Court will consider?

7. Specific applicants

8. What powers does the Court have? 9. Alternative Dispute Resolution

Funding

Conclusion

Introduction

Who can apply to the Court under the 1975 Act?

Categories of claimants (sometimes known as applicants)

The 1975 Act sets out the categories of people who are allowed to apply, namely:

• 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 and provided there is no agreement not to bring a claim);

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

• a child of the deceased (including an adult child);

• a person who was treated as a child by the deceased; and

• any other person who was being maintained* by the deceased immediately prior to their death.

* A person was being maintained by the deceased if they were financially supported, directly or indirectly, by the deceased. Examples of maintenance range from gifts given by the deceased during their lifetime, to simply providing an indirect benefit, such as by permitting a person to live rent free in their home.

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

Domicile of the deceased

Who can apply to the Court under the 1975 Act?

Is there a deadline for bringing a claim? 6. What are the questions the Court will consider?

Specific applicants

What powers does the Court have?

Alternative Dispute Resolution

Funding

Conclusion

1. Introduction

Is there a deadline for bringing a claim?

Early advice should be sought as a family provision claim requires formal Court proceedings to be issued within 6 months of the grant of probate or grant of letters.

The Court has discretion to permit claims which are brought after this time, but this is only exercised where there are exceptional circumstances which prevented a person from bringing a claim earlier e.g. where they were too unwell to commence proceedings a claim.

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

3. Domicile of the deceased

4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim?

6. What are the questions the Court will consider? 7. Specific applicants 8. What powers does the Court have?

Alternative Dispute Resolution

Funding

Conclusion

What are the questions the Court will consider?

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The Court will undertake a two-stage process:

What is reasonable financial provision?

The Court will undertake a two-stage process:

Stage 1: Does the Will or intestacy make reasonable financial provision for the claimant?

This will depend on the factors under the 1975 Act.

Has reasonable financial provision been made?

Stage 2: If not, what would reasonable financial provision be?

Each case turns on its own facts. No two cases are the same, and the Court will consider all of the circumstances. This can make predicting the outcome of family provision claims difficult.

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

Domicile of the deceased

Who can apply to the Court under the 1975 Act?

Is there a deadline for bringing a claim?

What are the questions the Court will consider?

What are the questions the Court will consider?

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The Court will undertake a two-stage process:

What is reasonable financial provision?

Has reasonable financial provision been made?

What is reasonable financial provision?

The question of reasonable financial provision differs depending on which category of person is applying:

• For most applicants the question is whether what they have received from the deceased’s estate amounts to reasonable financial provision for their maintenance;

• whereas for spouses or civil partners of the deceased, there is no requirement that it be for their maintenance - the question is one of reasonable financial provision in all the circumstances.

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

Domicile of the deceased 4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim? 6. What are the questions the Court will consider?

Specific applicants

What powers does the Court have?

What are the questions the Court will consider?

Has reasonable financial provision been made? Click

The Court will undertake a two-stage process:

What is reasonable financial provision?

Has reasonable financial provision been made?

For all applicants, whether reasonable financial provision has been made will be assessed objectively by the Court, taking into account all of the relevant circumstances. The Inheritance Act specifies certain factors which the Court must consider:

• the current and future financial resources and needs of the applicant, any other applicants, and the beneficiaries of the estate;

• any obligations and responsibilities which the deceased had towards the applicant and the beneficiaries;

• the size and nature of the estate;

• any physical or mental disability of the applicant or any beneficiary;

• …and any other matter which the Court may consider relevant, for example any party’s conduct.

All factors will be considered as they appear at the date of the Court hearing, not at the date of death. It is therefore essential that all the evidence is up to date at the time of the Court hearing and that it reflects any changes which may have occurred in relation to the claimant, the beneficiaries and the estate value.

There are also additional matters that the Court will have regard to for specific applicants.

Who can apply to the Court under the 1975 Act?

Is there a deadline for bringing a claim?

What are the questions the Court will consider?

Specific applicants

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Spouse or civil partners: additional considerations

Cohabitant: additional considerations

Child of the deceased/family: additional considerations Persons maintained by the deceased: additional considerations

Spouse or civil partners: additional considerations

Where the applicant is a spouse or civil partner, the Court will also consider what they would have likely received had the marriage or civil partnership been terminated by divorce or dissolution rather than death.

The Court will also consider:

• the age of the applicant,

• the length of the marriage/civil partnership; and

• the applicant’s contribution to the welfare of the deceased’s home and family.

Who can apply to the Court under the 1975 Act?

Is there a deadline for bringing a claim?

Specific applicants

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Spouse or civil partners: additional considerations

Cohabitant: additional considerations

Child of the deceased/family: additional considerations

Cohabitant: additional considerations

The Court will also have regard to:

• the length of the cohabitation; and

• the contribution by the applicant to the welfare of the family of the deceased, including looking after the home or caring for the family.

2. What is the Inheritance (Provision for Family and Dependants) Act 1975? 3. Domicile of the deceased

Persons maintained by the deceased: additional considerations

4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim? 6. What are the questions the Court will consider?

Specific applicants

What powers does the Court have?

Alternative Dispute Resolution

Funding

Specific applicants

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Spouse or civil partners: additional considerations

Cohabitant: additional considerations

Child of the deceased/family: additional considerations Persons maintained by the deceased: additional considerations

Child of the deceased/family: additional considerations

In respect of a child of the deceased and a person treated by the deceased as a child of the family, the Court will also have regard to the manner in which the child was being, or might expect to be, educated or trained.

Additionally, in respect of a person treated by the deceased as a child of the family (but not a child of the deceased), the Court will have regard to:

• whether the deceased maintained the applicant and, if so, for how long and on what basis, and the extent of the maintenance; and

• whether in maintaining or assuming responsibility for maintaining the applicant the deceased did so knowing the applicant was not their own child; and

• the liability of any other person to maintain the applicant.

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

Domicile of the deceased 4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim? 6. What are the questions the Court will consider?

7. Specific applicants

What powers does the Court have?

Alternative Dispute Resolution

Funding

Conclusion

1. Introduction

Specific applicants

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Spouse or civil partners: additional considerations

Cohabitant: additional considerations

Child of the deceased/family: additional considerations

Persons maintained by the deceased: additional considerations

The Court will also have regard to:

• the length of time and basis on which the deceased maintained them and the extent of maintenance; and

• whether and, if so, to what extent the deceased assumed responsibility for the maintenance of the applicant.

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

3. Domicile of the deceased

Persons maintained by the deceased: additional considerations

4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim?

6. What are the questions the Court will consider? 7. Specific applicants 8. What powers does the Court have?

Alternative Dispute Resolution

Funding

Conclusion

What powers does the Court have?

Where the Court finds that reasonable financial provision has not been made for the applicant, it has power to make an order.

The Court’s powers are very wide and it has numerous options available when making an order.

• It may award that a specific lump sum be paid to the applicant, either for a particular purpose or for general use. This is the most common order.

• Alternatively, it 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.

• It may also declare that any property be held on trust for the applicant and/or the other beneficiaries.

Introduction

2. What is the Inheritance (Provision for Family and Dependants) Act 1975? 3. Domicile of the deceased

4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim?

6. What are the questions the Court will consider? 7. Specific applicants 8. What powers does the Court have? 9. Alternative Dispute

Resolution

Funding

Conclusion

Introduction

Alternative Dispute Resolution

2. What is the Inheritance (Provision for Family and Dependants) Act 1975? 3. Domicile of the deceased

Family provision claims are very well suited to mediation or other forms of alternative dispute resolution. The advantage of this is that the parties can reach a solution to the claim that is acceptable to them as opposed to having the Court impose a resolution. The majority of claims settle and do not reach a final hearing. This is generally beneficial for all parties as it saves on costs, time and emotional distress.

4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim?

6. What are the questions the Court will consider? 7. Specific applicants

What powers does the Court have?

Alternative Dispute Resolution

Conclusion

1. Introduction

Funding

Often clients are concerned about how to fund either bringing or defending a claim. There are various funding options available depending on the circumstances, including paying on a simple time spent basis, deferring fees until the conclusion of the matter or entering into a “no-win, no-fee” arrangement where you only pay your solicitor’s fees if your claim is successful. We can discuss the pros and cons and availability of the different funding arrangements with you.

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

3. Domicile of the deceased

4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim?

6. What are the questions the Court will consider? 7. Specific applicants 8. What powers does the Court have?

Alternative Dispute Resolution

Funding

Conclusion

1. Introduction

Conclusion

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

In summary, claims under the 1975 Act are a technical and difficult area of law and there are many considerations to take into account when assessing whether a person may have a meritorious claim. We are experts in this field and can act for either applicants, defendant beneficiaries or the executors of estates which are contested in this way.

3. Domicile of the deceased

4. Who can apply to the Court under the 1975 Act?

5. Is there a deadline for bringing a claim?

6. What are the questions the Court will consider? 7. Specific applicants 8. What powers does the Court have? 9. Alternative Dispute

Resolution

Funding

Conclusion

Your M&R team

Beth

beth.price@mills-reeve.com