13th July 2020
Who should benefit when you die?
English law does not necessarily grant a family member the right to receive a share of a person’s estate on their death. This is referred to as “testamentary freedom” and was described in the 1869 case of Banks v Goodfellow as “English law leaves everything to the unfettered discretion of the testator…”.
Some 45 years ago the Inheritance (Provision for Family and Dependants) Act 1975, “the IPFD 1975 Act”, was introduced. This was not the first time testamentary freedom had been cut back but it has been the basis of an increasing number of claims in recent years. One could argue that it has given rise to an “expectation culture”. The IPFD 1975 Act allows certain categories of individual apply to court asserting that the distribution scheme made by a deceased’s Will (or the law relating to intestacy), does not make reasonable financial provision for them. This is an objective test.
The broad categories of persons able to bring a claim are:
- The deceased’s surviving spouse or surviving civil partner;
- A surviving former spouse or surviving former civil partner of the deceased, but not one who has formed a subsequent marriage or civil partnership;
- A cohabitant (someone who has lived in the same household as the deceased for a period of two years or more as their husband or wife);
- A child of the deceased;
- Any person treated by the deceased as being a “child of the family”; and
- Any person who immediately before the death of the deceased was being financially maintained, either wholly or partly, by the deceased.
Once “reasonable financial provision” has been found by the court not to have been made, the court exercises a discretion to determine what provision should have been made taking into account a number of specified factors.
It is clearly the case that there is tension between testamentary freedom and the application of the IPFD Act 1975. How is that managed by courts? To what extent are the testator’s wishes determinative?
In the case of Ilott v The Blue Cross and others 2017 the Supreme Court had to consider the tension between testamentary freedom and the application of the IPFD Act 1975. Despite her lifelong estrangement from her mother, Mrs Jackson, at first instance the daughter, Mrs Ilott, was awarded provision of £50,000 out of the estate worth £486,000. The Supreme Court restored this decision but Lady Hale, a dissenting Judge, felt that a arguable case could have been made for Mrs Ilott receiving nothing. So that the Supreme Court confirmed that the testator’s wishes are relevant. They are part of the circumstances of the case and fall to be assessed with or with the relevant factors in the round. A balance has to be struck, but how is this accomplished?
In Nahajec v Fowle the court considered that “the reasonableness of the deceased’s wishes are undoubtedly capable of being a factor for consideration” – this was a claim by an adult daughter of the deceased.
In the case of Banfield v Campbell the court awarded the claimant a life interest in half the proceeds of sale of a property to avoid the son of the deceased being deprived of capital and mention was made of testamentary wishes in the context of an evaluation of the testator’s “obligations” – section 3(1)(d). of the IPFD Act 1975.
In the 2019 case of Wellesley -v- Earl Cowley (another adult child’s claim against the deceased parent’s estate) the court mentioned testamentary wishes in the context of an evaluation of “all the circumstances” and there was a detailed examination of the reasons for the estrangement. The claim by the adult child was dismissed.
However, there have been other cases where limited weight has been attached to the testator’s wishes – e.g. Lewis v Warner, Ubbi v Ubbi and Clark v Allen. Lewis was a claim by a long term cohabitee. Ubbi was an infant child claim and Clark was a claim by a surviving widow.
These cases show that the outcome is very fact sensitive. This leads to the difficulty in predicting the outcome of a claim at the outset when all the facts may not necessarily be known. That having been said, a well drafted Will with good evidence certainly is more helpful than the reverse.
For more information either for drafting a Will which is as proof against IPFD 1975 Act claims as possible or for advice regarding bringing or defending an IPFD 1975 Act claim, please contact Edward Walter on 01892 502320, or at email@example.com.