Inheritance (Provision for Family and Dependants) Act 1975
About the Inheritance (Provision for Family and Dependants) Act 1975
A lot of people prepare beforehand for their death. They write a will and give clear instructions on the distribution of their estate upon their death. Sometimes, people do not want certain individuals or members of the family to inherit any share of their estate.
A lot of people are not aware of the Inheritance (Provision for Family and Dependants) Act 1975. The act facilitates the court in changing the specified distribution of a deceased individual’s estate. This could directly clash with the individual’s wishes (if there is a will) or the provisions for intestacy (if there isn’t a will). The court can do this for dependants and / or family members who:
• Are completely excluded from the will
• Were left less than they deserved
• Were excluded owing to intestacy
People can make claims under this Act if they are:
• A civil partner or spouse
• A former civil partner or spouse who did not marry again or have another civil partnership
• Someone who was living with the person who is deceased, for two years prior to death at least as their spouse
• The deceased’s progeny
• A person who was treated by the deceased as a child in a marriage of which the deceased was a part of.
• A person who the deceased was providing for immediately before his/her death.
Spouses or civil partners who file a claim under the Act are actually entitled to being financially provided for, within reason, given prevalent circumstances. It does not matter whether that provision is necessary for their sustenance.
Anybody else who files a claim is entitled to be provided for, but only to the extent that is necessary for their sustenance.
Prior to the enforcement of Inheritance and Trustees’ Powers Act 2014, the bill had proposed extending the scope of Inheritance (Provision for Family and Dependants) Act 1975. Under the amendment, eligible individuals would have been able to file claims against estates belonging to people who had their domiciles outside Wales and England. However, this was scrapped owing to the fact that it could have caused English courts to take decisions that would have been impossible to enforce on assets that were overseas. Furthermore, those decisions could have had the potential to interfere with the inheritance laws of other jurisdictions. However, if the deceased was domiciled in England and Wales while having assets located overseas, a claim can still be filed.
Celebrities That Excluded Their Children From Wills
In the recent past, a lot of celebrities such as Elton John, Sting and Nigella Lawson, became the subject of media attention because of deciding to exclude their children from their will. Joining their ranks is none other than Gordon Ramsey. His vast wealth will now, not be inherited by his children.
In England, the doctrine of freedom of testamentary capacity, gives individuals the discretion to decide who will inherit their estate. If the individual were to not leave anything for their children, the expectation would be that this wish would be upheld. However, as mentioned above, children of the deceased who were reliant on the parent, can file a claim and contest the will under (Provision for Family and Dependants) Act 1975 (‘the 1975 Act’)
In the past, chances of success in such cases for children were considered quite low. This was due to the difficulty that claimants would face in proving that they needed to be provided for. However a recent case (Ilott v Mitson & Ors (“Ilott”)) has passed through the courts, and in its passage, questions have been raised about how the future of testamentary freedom could be impacted by the probability of adult children successfully filing such claims.
In the case mentioned above, the deceased did not make a provision for her daughter and left the bulk of her estate to three charities (£486,000). The daughter, now 50 years of age and a married mother of five children, is dependent on the state for making up 75% of the household income. She contested the contents of the will, in spite of being estranged for 30 years from her mother. It could not have been clearer that the deceased did not want her daughter to receive any part of her estate.
The first time, it was concluded by the District Judge that the deceased had not reasonably provided for her daughter and awarded the daughter £50,000. This decision was appealed by the daughter on the grounds that the amount was insufficient. The decision was hence reversed and there was a finding that favored the charities. The daughter repeated her appeal and the Court of Appeal again passed judgment favorably for her. The case was sent again to the High Court to decide the amount. The charities appealed this, and the Supreme Court then passed judgment that favored the charities. The award of £50,000 was reinstated.
Ever since then, there has been a considerable increase in claims being filed under the 1975 Act. However it is to be kept in mind that the eligibility of people is very specific under the 1975 Act. Potential beneficiaries need to know that the courts will carry out the necessary due diligence to ascertain the validity of the claim being filed.
The importance of limiting awards to “maintenance” was emphasized by The Supreme Court. The importance of testamentary freedom was also emphasized. In the Act, the amount that serves as adequate “maintenance” is not defined, which proved to be difficult for the Supreme Court.
It’s best for solicitors to make sure that they maintain a record of their discussions with testators that involve what their progeny is to be bequeathed and the reason for the same. If the will of the testator is contested later on, this could prove to be useful. It’s also better for individuals to maintain a letter of wishes that clearly state why he/she wishes to distribute his/her assets in the manner specified in the will.
Author – Jeffrey Avery