If you leave somebody out of your will, or make provision for them which they feel is too low, they may bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act). This brief guide explains who could claim, and when they might succeed.
Who can claim under the 1975 Act?
Only certain categories of people can claim under the 1975 Act. These include spouses or civil partners, former spouses or civil partners, cohabitating partners (who lived with the deceased for at least two years prior to their death), children and other dependants who have been financially maintained by the deceased.
The test of reasonable financial provision
The Court applies an objective test when considering claims. It looks at whether the will failed to make reasonable financial provision for the claimant taking into account certain factors, and the standard of provision applicable to the claimant.
There are two standards of provision. The first is for a claimant who is the spouse or civil partner of the deceased. This standard looks at what is reasonable for the claimant to receive and is often decided by reference to what the claimant could expect to achieve on divorce (although this isn’t treated as an upper or lower limit for awards).
For any other type of claimant the standard of provision is based on what would be reasonable for the claimant to receive for their maintenance considering the circumstances of the case.
The following factors are considered:
• The financial resources and needs the applicant, any other applicant and any beneficiary the estate has now or is likely to have in the foreseeable future
• The obligations and responsibilities which the deceased had towards any applicant or beneficiary of the estate
• The size and nature of the net estate
• Any physical or mental disability of any applicant or beneficiary of the estate
• Any other matter, including the conduct of the applicant or other person, which the Court may consider relevant.
What provision might be made?
There is a range of awards the Court can make, including an outright capital sum, a right to income, deferred payments, an amount on trust or an option to purchase an asset of the estate. The value of the award depends on the factors above.
How can I prevent a claim under the 1975 Act?
If you think that somebody might try to make a claim against your estate, there are some steps you can take to reduce the risk of a claim succeeding.
You can leave a letter explaining why you left your estate in the way you have, including positive reasons for selecting the beneficiaries you have chosen, and including any explanations for not making a greater provision for the potential claimant (such as substantial lifetime gifts to them). This will be taken into account by the Court if a claim is made.
You may also leave a limited provision for a potential claimant in your will, along with a clause stating that the gift is conditional upon the individual not challenging the will (also known as a no-contest clause). Whilst this doesn’t prevent a claim, it will make a claimant consider whether (given the uncertainty of litigation) it is worth risking the smaller inheritance they would have been guaranteed to receive for the uncertainty of potentially winning a larger settlement. If you do this, you should regularly review the level of provision for that person to ensure that it remains an effective deterrent.
A final alternative is to consider a discretionary trust in your will, along with a memorandum of wishes to the trustees, explaining how you would like them to consider exercising their powers. This allows the trustees to exercise their discretion when distributing funds to that particular beneficiary and could prevent a Court case from arising at all. This might be a good approach where you are worried about the beneficiary having a right to large sums of money. Again this won’t automatically prevent a potential claim against the estate, but if an agreement could not be reached and the Court became involved, the Court would take the memorandum of wishes into account when deciding on whether to make an award to that beneficiary.
Who can see my will?
Once the Grant of Probate has been issued a will becomes a public document and can therefore be easily accessed. Prior to receiving probate, there is no legal obligation to provide any relative or potential beneficiary with a copy of the will.