A claim under the Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”) is for “reasonable financial provision”.
This claim can be brought if a Will does not make sufficient provision for a claimant, or if there is an intestacy and the intestacy rules (where there is no Will) do not reasonably provide for a claimant.
Spouses, former spouses, children, and other persons who were financially maintained by the deceased before their death can bring a claim for reasonable financial provision under the Act.
The Act requires the Court to ask two questions:
The Court is then required to consider the factors set out in Section 3 of the Act:
Each case is decided on its own facts – there is no standard award in these claims.
Spouses are treated differently to other applicants. A claim for reasonable financial provision for a spouse looks at the age of the applicant, duration of the marriage, contribution to the welfare of the family and crucially the provision which the applicant might have received had the marriage/civil partnership ended not on death but on divorce or dissolution.
The “divorce cross check” gives a nominal starting point for such claims of a 50/50 division of the Estate to the widow or widower. The Court will then look at the specific circumstances of each given claim and adjust the provision up or down accordingly.
All other applicants’ claims are considered on “maintenance” basis. The Supreme Court in the case of Ilott v Mitson [2017] UKSC 17 set out what constitutes “maintenance”:
The Court has a wide discretion as to how to make reasonable financial provision for someone including awarding lump sums or life interests or funding (for example) courses or transport to allow a claimant to improve their own living circumstances at a more modest cost to the Estate.
Claims under the Inheritance (Provision for Family and Dependants) Act 1975 are not carte blanche for claimants to put forward claims for extravagant lifestyles and the Court will balance their needs and those of other beneficiaries or claimants.
Such claims are complex and there is no definitive formula that is applied to reach the “right” figure for reasonable financial provision. Ideally claims are negotiated prior to the issue of proceedings and resolved by agreement as this preserves as much of the Estate as possible and reduces overall legal costs.
Where agreement to settle such claims cannot be reached Court proceedings may be the only way forward.
Whilst claims are being considered or progressed a claimant can consider making an application under Section 5 of the 1975 Act for an interim distribution to help them with immediate financial needs and legal costs. Seeking expert legal advice on such claims is therefore of paramount importance.
If you think you may have a claim for reasonable financial provision, or if you are a beneficiary of an estate in which a claim is brought against, please contact our Contentious Trusts and Probate team for advice.
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