THE INHERITANCE (PROVISION FOR FAMILY AND DEPENDANTS) ACT 1975

What is the current legal position?

The Inheritance (Provision for Family and Dependants) Act 1975 enables certain categories of applicant to claim financial provision out of an estate for maintenance, or if the applicant is a spouse of civil partner, for maintenance or otherwise. The decision to award is discretionary determined by the Court in accordance with statutory factors which must be applied to each case to ascertain whether it is fair to make an award and deprive a beneficiary of their entitlement under the Last Will and Testament. The decision to award is therefore fact-dependent in each case and as such, the outcome of a case is difficult to foresee due to the wide discretionary system.

Why does this law exist?

The current legalities are considered as a vehicle which restricts individual freedom to dispose of assets in whatever way one chooses. Regardless of this, the ability to apply for financial provision is beneficial and justified in situations where one dies unexpectedly having failed to revisit their Will following a change in family circumstances. In such situations, the Court is entitled to accept that the Last Will may not represent the deceased’s intent at death due to such circumstantial changes where the deceased has not amended his Will.

What are the advantages and disadvantages of the current regime?

The discretionary checklist that must be applied to a claim in Court as mentioned above is advantageous as it is flexible in adapting to differing family situations. In accordance with this checklist, an award will only be made if a dependant is in need of maintenance, balancing such need against the interests of the beneficiaries named in the Will. This flexible checklist imposes a heavy burden for an applicant to prove his case as they are not automatically entitled to an award. Beneficiaries do not have to similarly justify their entitlement.

One disadvantage is that the Court is not obliged to consider the deceased’s reasons in excluding an individual and providing for their chosen beneficiary. The act generally responds to need rather than fairness in the circumstances and so the deceased’s wishes may not be consulted at all if the dependant has a real need for financial provision. Making a Will if you wish to exclude a family member is of upmost importance to set out in depth reasons for excluding a person, so that the Court are inclined to take your wishes into account.

Recent Developments

Following the recent decision of Ilott v Mitson in 2017, the Court reasserted freedom of testation. By this we mean that the central consideration when determining an application under the act is the deceased’s right in leaving his property to whoever he wishes. Following this decision, recent cases have given weight to a deceased’s wishes. This emphasis allows an individual to be confident that their wishes will be respected.

Overall

It is important to understand that there is no automatic right to claim and the discretionary system does not guarantee claimants an award. Following the case of Ilott it seems that the interests of the chosen beneficiaries under the act are given greater consideration in determining a third party’s claim however one must always look to protect themselves against such claims.

What can I do to reduce the risk of a successful claim against my estate?

Despite the difficulties that applicants, the cost and unpredictability of outcome at trial often means that claims settle before reaching Court at Mediation and thus, applicants receive an award, albeit sometimes small.

Therefore, to reduce the risk of a successful claim under the act, we advise that one revisits their Will every five years or where there has been a significant change to family or financial circumstances to ensure that the same still accords with their wishes. Further, marriage and divorce impact a Will and the position on Intestacy (where one dies without a Will) for a cohabitant is inherently weak, thus in a change of circumstances, revisiting a Will is vital. Also, where one has children from a previous marriage, making a Will is essential to ensure such children inherit without having to claim under the act.

Placing a clause in the Will preventing another from claiming under the act is void. However, including a statement in your Will explaining why provision has not been made for a certain person is advisable as the Court may take this into account when determining whether to make an award.

To prevent such claims arising after death or to safeguard the estate so far as possible against successful claims, it is important that you seek legal advice. For advice on your position, contact our specialist Wills and Probate team on 0800 015 0340 to arrange to see a member of our team at any of our offices across West Yorkshire.