Claims under the Inheritance (Provision for Family and Dependants) Act 1975 - Factors considered by the court

Introduction

The Inheritance (Provision for Family and Dependants) Act 1975 establishes the legal framework allowing specific individuals to claim reasonable financial provision from a deceased person's estate when a will or the rules of intestacy fail to do so. It authorizes courts to adjust the distribution of assets to ensure that dependants and close family members are not left without necessary support, balancing the deceased's testamentary freedom with social responsibility.

Statutory Framework and Scope of the Act

Under the Act, eligible applicants can seek financial provision by demonstrating that the estate's distribution does not make reasonable provision for them. Section 3 lists the factors the court must consider when determining these claims, providing a structured method for assessing each case's unique circumstances.

Eligible Applicants

The individuals entitled to apply include:

1. Spouses or Civil Partners: Those married to or in a civil partnership with the deceased at the time of death.
2. Former Spouses or Civil Partners: Individuals who have not remarried or entered a new civil partnership since their relationship with the deceased ended.
3. Cohabitants: Persons living with the deceased as if they were a spouse or civil partner for at least two years immediately before death.
4. Children: Biological, adopted, or those treated as a child of the family by the deceased.
5. Dependants: Anyone maintained wholly or partly by the deceased immediately before death.

Key Factors the Court Considers

When assessing a claim, the court evaluates several statutory factors to determine whether reasonable financial provision has been made and, if not, what provision would be appropriate.

1. Financial Resources and Needs of the Applicant

The court carefully examines the applicant's financial circumstances, both current and foreseeable. This analysis includes:

• Income and Earning Capacity: Present earnings and potential to earn in the future.
• Financial Obligations and Responsibilities: Debts, loans, and dependants reliant on the applicant.
• Assets and Resources: Ownership of property, savings, investments, and other valuable assets.
• Standard of Living: The lifestyle the applicant maintained during the deceased's lifetime.

Consider Re Coventry, where the court assessed an applicant with limited income and minimal future earning potential due to age and health issues. The court awarded provision to meet her housing needs, reflecting her financial vulnerability.

2. Financial Resources and Needs of Other Beneficiaries

Balancing the interests of all parties, the court also evaluates the financial circumstances of other beneficiaries. This ensures that any provision for the applicant does not unfairly prejudice others entitled under the will or intestacy rules. Factors considered include their income, assets, and financial commitments.

3. Obligations and Responsibilities of the Deceased

The nature of any obligations the deceased had towards the applicant and other beneficiaries is a key consideration. These obligations may be legal or moral, arising from:

• Familial Relationships: Duties as a spouse, parent, or caregiver.
• Promises or Agreements: Prior commitments or assurances made to the applicant.
• Contributions by the Applicant: Financial or non-financial support provided to the deceased.

In Ilott v The Blue Cross and others [2017] UKSC 17, the Supreme Court examined the extent of the deceased's obligations to her estranged adult daughter. Despite explicit exclusion from the will, the daughter's financial needs and the deceased's moral responsibilities influenced the court's decision.

4. Size and Nature of the Estate

The composition and value of the estate influence the court's ability to make provision without disproportionately affecting other beneficiaries. Considerations include:

• Total Value of Assets: The overall wealth available for distribution.
• Liquidity of Assets: Whether assets are readily convertible to cash.
• Existing Liabilities: Debts and obligations that must be settled by the estate.

If the estate primarily consists of illiquid assets like a family home or business, the court may seek solutions that provide for the applicant's needs without necessitating asset liquidation.

5. Physical or Mental Disabilities

Any physical or mental disabilities of the applicant or beneficiaries are significant considerations. The court assesses:

• Current and Future Care Needs: Medical expenses, required assistance, and long-term care planning.
• Impact on Earning Capacity: Limitations on the ability to generate income.
• Availability of Support Services: Access to state benefits or other assistance.

6. Any Other Relevant Factors

The Act grants the court discretion to consider any additional factors deemed relevant, allowing for a comprehensive assessment tailored to the case's specifics.

Interrelationship with Other Legal Areas

Claims under the Inheritance Act often intersect with other legal principles, influencing the court's approach.

Property Law Considerations

Assets held in joint tenancy pass automatically to the surviving joint tenant and fall outside the estate. However, the court may consider the lack of benefit to the applicant from such assets when assessing their financial needs.

Contractual Obligations

Contracts made by the deceased, such as mutual wills or agreements to leave property, can affect the estate's ability to satisfy claims. The court must address these commitments while considering the applicant's needs.

Family Law Influences

Previous divorce settlements or maintenance agreements impact the perceived obligations of the deceased. The court examines these past arrangements to determine if adequate provision was already made.

Practical Applications

Understanding how these factors interact assists in anticipating court decisions and strategizing accordingly.

• Evidence Gathering: Comprehensive financial disclosure from all parties is essential for the court's evaluation.
• Time Constraints: Applications must be made within six months from the date of the grant of representation, necessitating prompt action.
• Alternative Dispute Resolution: Mediation may offer a less adversarial means to resolve disputes, potentially preserving family relationships.

Conclusion

Assessing claims under the Inheritance (Provision for Family and Dependants) Act 1975 involves a detailed analysis of statutory factors. The court evaluates the financial needs and resources of the applicant and beneficiaries, the deceased's obligations, and the estate's nature to determine the appropriateness of financial provision. The interplay between these considerations and other legal domains, such as property and family law, highlights the challenges in inheritance disputes. A thorough understanding of these concepts is indispensable for effectively dealing with the legal complexities surrounding the Act, ensuring that rightful claims are fairly adjudicated within the bounds of the law.