Wills and inheritance tax
Generally speaking, we are all free to dispose of our assets as we want to. However, the law does provide protection for people who have been financially dependant on the deceased. This protection comes in the shape of the Inheritance (Provision for Family and Dependants) Act 1975; known as the Inheritance Act.
The Inheritance Act is there to help spouses, children, civil partners, cohabitees and other surviving dependants who have been left to cope without sufficient money to enable them to get by. If a will (or intestacy) fails to make 'reasonable financial provision' then the Inheritance Act will come into play.
In order to bring a claim you must satisfy the Court that you are entitled to make the claim. The Act states that the following must apply:
- The deceased must have been living in England and Wales at the time of their death.
- You, as the applicant, must be one of the following:
- the spouse or civil partner of the deceased;
- the former spouse or former civil partner of the deceased (as long as the deceased has not re-married or formed another civil partnership);
- a child of the deceased;
- where there is a marriage or civil partnership, a person who was treated by the deceased as a child of the family;
- immediately before the death of the deceased you were dependent, either wholly or partly, on the deceased.
- if cohabiting with the deceased, then you must have been living with the deceased for a period of at least two years.
- The application must be made within six months of the Grant of Probate or Letters of Administration (the applicant will have a further four months to serve proceedings once issued)
The Court has to consider whether 'reasonable financial provision' has already been made for you. The extent and meaning of 'reasonable financial provision' has to be decided by the Court and is different according to your status.
Under the Inheritance Act, the court will take into account the applicant's needs and resources and consider these against what would be reasonable for their maintenance. The Court will look at the following matters as set out in section 3(1) of the 1975 Act:
- the financial resources and financial needs of the applicant;
- the financial resources and financial needs of any other applicant;
- the financial resources and financial needs of any beneficiary of the estate;
- any obligations and responsibilities which the deceased had towards any applicant or any beneficiary;
- the size and nature of the deceased's estate;
- any physical or mental disability of any applicant or any beneficiary;
- any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.
Claims by spouses and civil partners are different as the court will look beyond what is necessary purely for maintenance and will take a number of other factors into consideration such as:
- The age of the person making the Inheritance Act claim
- The duration of the marriage
- The contribution to the welfare of the family that has been made by the person bringing the Inheritance Act claim
- The provision that the person bringing the Inheritance Act claim might reasonably have expected to receive if the marriage had been terminated by divorce
The Types of Orders the Court can Make
Section 2 of the Act enables the Court to make any one or more of the following orders:-
- a periodical payments or 'maintenance' order, for regular payments of a specific sum;
- a lump sum order - or 'one off' payment;
- a transfer or sale of property order;
- an order redistributing or acquiring property, for example, for a trust for the applicant;
- an order varying any pre-nuptial or post-nuptial settlement (including such a settlement made by will) where the deceased was married.
This firm advises both individual claimants wishing to make a claim for adequate financial provision and beneficiaries who want to defend their interests under a disputed will.
We firmly believe that Inheritance Act disputes should wherever possible be mediated outside of a court environment. We embrace all types of Alternative Dispute Resolution (ADR) as a more speedy, cost-effective option to court.
If you are considering a claim under the Inheritance Act, it is essential that you seek specialist advice at the earliest opportunity. Remember, Inheritance Act claims must be brought within 6 months of the Grant of Representation to the estate. If you have already left it too long we may still be able to help, as long as you act quickly.
For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.