Wills 21

Question 1

Can testators making a will dispose of their estate as they see fit?

Answer 1

Yes, as they have ‘freedom of testation’. Note, this is subject to a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (‘the 1975 Act’), as amended

Question 2

Who does the Inheritance (Provision for Family and Dependants) Act 1975, as amended apply to?

Answer 2

• Under the Act, an application for family provision claim may be made to the court to set aside the terms of a will (or vary an intestacy) of a person who died domiciled in England and Wales on the grounds that reasonable financial provision has not been made for the applicant. * In some circumstances a family provision claim may be made against a person who was not domiciled in England and Wales if the deceased left property and family members or dependants there.

Question 3

When must an application under the Inheritance (Provision for Family and Dependants) Act 1975 be made?

Answer 3

Within six months from the issue of the grant of representation to the PRs, or later with leave of the court.

Question 4

How can PRs protect themselves from any personal liability arising under any late permitted claim under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 4

By waiting six months from the date of the grant before distributing the estate to beneficiaries.

Question 5

Who may apply to make a claim under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 5

• The surviving spouse or civil partner* A former spouse or civil partner who has not remarried nor formed a civil partnership. * A child of the deceased or a person treated as a child of the family of the deceased (such as a step-child). * A person who was being maintained, wholly or partly, by the deceased before the death. The deceased needs to have been making a substantial contribution towards the reasonable needs of the claimant. * A person who was living with the deceased during the whole of the two-year period immediately before the death as the spouse, civil partner, or same sex partner of the deceased.

Question 6

When will a former spouse/civil partner be barred from making a claim under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 6

If they had a ‘clean break’ divorce from the deceased.

Question 7

When will children be unlikely to be successful in a claim under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 7

Adult children are unlikely to be successful in a claim if able-bodied and in employment.

Question 8

How is it determined whether a will has made ‘reasonable financial provision’?

Answer 8

Two-part test: * Have the will or intestacy rules failed to make reasonable financial provision for the applicant? * If so, what would be such provision?Note, the standard for spouses and all other applicants are different.

Question 9

What is the test for ‘reasonable financial provision’ for a spouse?

Answer 9

The standard is such financial provision as would be reasonable in all the circumstances, whether or not required for maintenance. * The court should consider what would be awarded in a divorce. * The court has discretion to apply the surviving spouse standard to former spouses if the death occurs within 12 months of the decree absolute and no final order has been made in those divorce proceedings.

Question 10

What is the test for ‘reasonable financial provision’ for an applicant who is not a spouse?

Answer 10

The standard is such provision required for their maintenance such that they can live decently and comfortably according to their situation. * The test is objective* Note, evidence of the deceased’s reasons for not providing in their will for an applicant is admissible. The reasons could be set out in the will itself or in an accompanying private document.

Question 11

When might the court apply the standard of reasonable financial provision applicable to a spouse to a former spouse?

Answer 11

The court has discretion to apply the surviving spouse standard to former spouses if:* the death occurs within 12 months of the decree absolute and * no final order has been made in those divorce proceedings.

Question 12

What are the 5 general guidelines a court must consider under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 12

• Financial resources and needs of the applicant, any other applicant, and any beneficiary (now or in the future)* Any moral obligation of the deceased to any applicant or beneficiary* Size and nature of the net estate of the deceased* Physical or mental disability of any applicant or beneficiary and * Any other relevant matter, including the conduct of any person.

Question 13

What are the 3 guidelines specific to a surviving/former spouse must a court consider in addition to the general guidelines under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 13

• Their age and the duration of the marriage* Their contribution to the welfare of the deceased’s family and * The provision which might have reasonably been expected on divorce at date of death (this is only a starting point). This must be considered for a survivng spouse but may be considered for a former spouse at the discretion of the court.

Question 14

What are the 3 guidelines specific to a cohabitant must a court consider in addition to the general guidelines under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 14

• Their age, * How long they lived as spouses, and * Their contribution to the welfare of the deceased’s family.

Question 15

What guideline specific to a child must a court consider in addition to the general guidelines under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 15

The manner in which they were, or might be expected to be, educated.

Question 16

What are the 3 guidelines specific to a child of the family must a court consider in addition to the general guidelines under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 16

Whether the deceased:* maintained the applicant (and if so, if the deceased knew the applicant was not their own child), * for how long, and * to what extent.

Question 17

What types of orders can be made if a court approves an application under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 17

The court has very wide discretion and has the powers to make the following orders: * the transfer of property* payment of a lump sum (most common)* payment of income* settlement of property on trust.

Question 18

What property of the deceased is relevant to an order made by the court under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 18

Orders can be made out of:* the deceased’s net estate at the date of death (i.e. after funeral and administration expenses, debts and liabilities, and inheritance tax) and * the deceased’s severable share of a joint tenancy. The court also has powers to make an order regarding property disposed of by the deceased before death if that disposal was intended to avoid the provisions of the 1975 Act.

Question 19

What is the relevant date for IHT purposes if an order is made under the Inheritance (Provision for Family and Dependants) Act 1975?

Answer 19

Any order is read back to the date of death

Question 20

A testator was financially supporting his elderly sister before his death, but he didn’t provide for that sister in his will. The sister can apply under the 1975 Act as a person who was being maintained by the deceased before his death. What will the court consider in terms of the application?

Answer 20

• First, the court will assess whether the will failed to make reasonable financial provision for the sister. A reasonable provision would be an amount required for the sister’s maintenance such that she can live decently and comfortably according to her situation.* Since the testator didn’t leave anything to the sister, it’s clear that he didn’t reasonably provide for her. Next, the court will determine what a reasonable provision would be. So the court would look at things like the sister’s financial needs, the size of the testator estate, and any moral obligation for the testator to his sister. If the court decides that the will should be set aside to provide for the sister, it will approve her application. * The court can then order the estate to, e.g. pay a lump sum or transfer property to her.