Claims under the Inheritance (Provision for Family and Dependants) Act 1975 - Impact on estate distribution

Learning Outcomes

After reading this article, you will be able to identify who can bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975, explain the legal standards and factors the court applies, and understand the potential impact of such claims on the distribution of an estate. You will also be able to apply these principles to SQE1-style scenarios and MCQs.

SQE1 Syllabus

For SQE1, you are required to understand the effect of claims under the Inheritance (Provision for Family and Dependants) Act 1975 on the distribution of estates. In your revision, focus on:

• the categories of people who may apply for financial provision from an estate under the Act
• the legal standards for "reasonable financial provision" and how they differ for spouses/civil partners and other applicants
• the factors the court must consider when deciding whether to make an order and what type of order to make
• the types of orders the court can make and their practical effect on estate distribution
• the time limits and procedural requirements for bringing a claim
• the practical consequences for personal representatives and beneficiaries

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Who is eligible to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975?
2. What is the difference between the "maintenance standard" and the "spousal standard" for reasonable financial provision?
3. Name three factors the court must consider when deciding whether to make an order under the Act.
4. What is the usual time limit for bringing a claim under the Act, and can it be extended?
5. How can a successful claim under the Act affect the distribution of an estate under a will or intestacy?

Introduction

The Inheritance (Provision for Family and Dependants) Act 1975 ("the Act") allows certain people to apply to the court for financial provision from a deceased person's estate if the will or intestacy rules do not make reasonable provision for them. This can change the way an estate is distributed, even if the deceased left a valid will. For SQE1, you must know who can claim, what the court considers, and how such claims can alter the intended distribution of assets.

Who Can Claim?

Only people in specific categories can apply for financial provision under the Act. These are:

• the deceased's spouse or civil partner at the time of death
• a former spouse or civil partner who has not remarried or entered a new civil partnership (unless barred by a court order)
• a person who lived with the deceased as spouse or civil partner in the same household for at least two years immediately before death
• a child of the deceased (including adult children)
• a person treated by the deceased as a child of the family (such as a stepchild)
• any person who was being wholly or partly maintained by the deceased immediately before death

Key Term: applicant
A person in one of the categories above who is entitled to apply for financial provision from the estate under the Act.

What Is "Reasonable Financial Provision"?

The Act sets out two standards for what counts as "reasonable financial provision":

• For spouses and civil partners, the standard is what would be reasonable in all the circumstances, whether or not required for their maintenance. The court may consider what the applicant would have received on divorce.
• For all other applicants, the standard is what would be reasonable for their maintenance only.

Key Term: reasonable financial provision
The amount or type of provision the court considers fair for the applicant, applying the relevant standard under the Act.

What Does the Court Consider?

The court must weigh up all the circumstances of the case. Section 3 of the Act lists the factors the court must consider, including:

• the financial resources and needs (now and in the foreseeable future) of the applicant
• the financial resources and needs of any other applicant and any beneficiary
• any obligations and responsibilities the deceased had towards the applicant or any beneficiary
• the size and nature of the estate
• any physical or mental disability of the applicant or any beneficiary
• any other relevant matter, including the conduct of any person

For spouses/civil partners, the court also considers the applicant's age, the duration of the marriage/civil partnership, and their contribution to the family.

Key Term: maintenance standard
The standard applied to all applicants except spouses/civil partners: provision for their maintenance only.

Key Term: spousal standard
The standard applied to spouses/civil partners: provision as would be reasonable in all the circumstances, not limited to maintenance.

Time Limits and Procedure

A claim must normally be brought within six months of the grant of probate or letters of administration. The court has discretion to allow late applications, but this is rare and only with good reason.

Key Term: grant of representation
The legal document (probate or letters of administration) giving authority to deal with the estate.

Types of Orders the Court Can Make

If the court finds that reasonable financial provision has not been made, it can make a wide range of orders, including:

• payment of a lump sum
• regular (periodical) payments
• transfer of specific property to the applicant
• settlement of property for the applicant's benefit
• acquisition of property for the applicant
• variation of ante-nuptial or post-nuptial settlements (for spouses/civil partners)

The court can also make interim orders for urgent financial support while the claim is pending.

Key Term: estate
All the property, money, and assets owned by the deceased at death, available for distribution.

Impact on Estate Distribution

A successful claim under the Act can change how the estate is distributed, overriding the terms of the will or the intestacy rules. The court's order takes priority, and the personal representatives must distribute the estate in accordance with the order. This may reduce the share of other beneficiaries.

Worked Example 1.1

Scenario:
Maya dies leaving a will giving her entire estate to her brother. She is survived by her long-term partner, Sam, who lived with her for three years before her death. Sam was financially dependent on Maya but is left nothing in the will.

Question:
Can Sam bring a claim under the Act, and how might this affect the estate distribution?

Answer:
Yes. Sam qualifies as an applicant (as a cohabitant living with the deceased for at least two years). If the court finds that reasonable financial provision was not made for Sam, it may order a lump sum or other provision for him from the estate. The brother's share will be reduced accordingly.

Worked Example 1.2

Scenario:
James dies intestate, survived by his wife and two adult children. His will left everything to his wife, but after divorce he did not make a new will. The estate passes under the intestacy rules. One child, Anna, is disabled and financially dependent on James. Anna receives only a small share under intestacy.

Question:
Can Anna claim more from the estate?

Answer:
Yes. Anna is a child of the deceased and can apply for reasonable financial provision. The court will consider her needs and may order additional provision for her, reducing the shares of the other beneficiaries.

Exam Warning

For SQE1, remember that adult children can claim under the Act, but the court will not automatically make provision unless there is a real need for maintenance or special circumstances. The court balances the needs of all applicants and beneficiaries.

Revision Tip

When answering MCQs, check the applicant's relationship to the deceased, their financial needs, and whether the claim is within the time limit. Apply the correct standard for reasonable provision.

Summary

Key Point Checklist

This article has covered the following key knowledge points:

• The Act allows certain categories of people to claim financial provision from an estate if reasonable provision is not made.
• The court applies different standards for spouses/civil partners and other applicants.
• The court considers the applicant's and beneficiaries' financial needs, the size of the estate, and other relevant factors.
• Orders can include lump sums, regular payments, or transfers of property, changing the estate distribution.
• Claims must usually be brought within six months of the grant of representation.
• Personal representatives must comply with any court order, even if it overrides the will or intestacy.

Key Terms and Concepts

• applicant
• reasonable financial provision
• maintenance standard
• spousal standard
• grant of representation
• estate