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Inheritance Act Fact Sheet

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1. Introduction

Where an individual has died without making proper provision in their Will for their relatives or dependants, judges have a wide discretion to redistribute assets to produce a fair result. There is no magic formula involved although certain factors must be taken into account and these are listed further on in this fact sheet. It must be remembered that each case is very different and will be judged on its own individual facts. As your solicitors, we cannot predict exactly what would be awarded but we can advise you of the likelihood that the court will consider making an order, and what to expect within certain limits.

To explain some of the terms used in this fact sheet, the ‘estate’ is a general word for an individual’s assets of which they have the power to dispose in their Will. After somebody dies, ‘Personal Representatives’ are normally appointed to represent the estate, and to administer the assets owned by the deceased. They must make decisions about the day to day management of any assets and are ultimately responsible for distributing those assets in accordance with the deceased’s Will or with the laws of Intestacy (if the deceased died without a valid Will). The Personal Representatives will usually be the defendants to any claim under the Inheritance Act, along with any beneficiaries of a Will.

Once you have read this information sheet we hope you will have a better idea as to how these cases are decided. This information sheet is meant as a guide only, so please feel free to ask the solicitor acting for you any questions at any stage of your case.

2. Who can apply for an order

Under the Inheritance (Provision for Family and Dependants) Act 1975 (hereafter referred to as ‘the Inheritance Act’), only certain people are entitled to make an application to the court for an order. Broadly speaking, these are the immediate family of the deceased, or their partner if they were living together as husband and wife (or as civil partners).

In order to make an application under the Inheritance Act, the applicant must also show that the deceased was ‘domiciled’ in England or Wales, which, in very broad terms, means that they were permanently based in this jurisdiction.

3. When to apply for an order

Any application under the Inheritance Act must be made within six months of the Personal Representatives obtaining a grant of probate to allow them to administer the estate. Outside this time limit, the court’s permission will be needed to allow the applicant to begin proceedings. This permission is usually given only in exceptional circumstances.

4. Grounds for making a claim

There is only one ground for a claim under the Inheritance Act, which is that the disposition (or division) of the deceased’s estate, whether following his Will or under the laws of Intestacy, does not make reasonable financial provision for the applicant.

Where the applicant is a spouse, or a civil partner, of the deceased, ‘reasonable financial provision’ means such provision as would be reasonable in all the circumstances of the case for a husband or wife or a civil partner to receive, whether or not that provision is required for his or her maintenance. The court must consider, but is not bound to follow, the likely settlement that would have made within divorce proceedings, if the parties had divorced rather than the deceased having died. You may hear this referred to as the ‘divorce fiction’.

For all other applicants under the Inheritance Act, ‘reasonable financial provision’ means such provision as it would be reasonable in all the circumstance of the case for the applicant to receive for his maintenance. Thus the court will not make an order in these circumstances only because the applicant feels that the Will or Intestacy is unfair or is not as they expected. The applicant must show that he had a reasonable expectation of having his living costs met by the deceased. If the applicant was financially independent of the deceased before the date of death, it may be very difficult to show such an expectation.

5. Orders The Court Can Make

The judge has a wide discretion to redistribute assets to provide a fair result. The court can make any of the following orders:-

a) an order that the applicant should receive regular payments (known as ‘periodical payments’) from the net estate of the deceased, for as much and for as long as the judge considers reasonable.
b) an order that the applicant should receive a single lump sum payment from the estate.
c) an order that a property owned by the deceased be transferred to the applicant.
d) an order for the settlement of any property for the benefit of the applicant ie. an order creating a trust for the applicant
e) an order for the purchase of property using assets of the estate, and for such property either to be transferred to the applicant or to be held in trust for his benefit.
f) an order varying any pre- or post-nuptial (or pre- or post-civil partnership) settlement to which the deceased was a party, for the benefit of a surviving spouse or civil partner, or for a child or step-child of the deceased.

In cases where the court is satisfied that the applicant is in immediate need of financial assistance, but it is not yet possible to reach a final decision about the order that should be made, and the court is satisfied that there are assets available to meet the applicant’s immediate needs, the court also has jurisdiction to make ‘interim’ orders for a payment or payments from the estate. Any such payments may be taken into account when a final order is made.

5. Factors The Court Must Consider

In deciding whether to make an order under the Inheritance Act, the court must first decide whether the Will of the deceased, or the laws of Intestacy, make reasonable financial provision for the applicant, and only if such provision has not been made, whether and in what manner it should exercise its powers to make one of the above orders.

The specific factors that the court must by law consider when deciding these questions are as follows:-

  1. the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;
  2. the financial resources and financial needs which any other applicant for an order under the Inheritance Act from the estate of the deceased has or is likely to have in the foreseeable future;
  3. the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;
  4. any obligations and responsibilities which the deceased had towards any applicant for an order or towards any beneficiary of his estate;
  5. the size and nature of the net estate of the deceased
  6. any physical or mental disability of any applicant or any beneficiary of the estate
  7. 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.

In cases where the applicant is a spouse or civil partner, the court must also consider those factors given weight within divorce proceedings, such as the length of the marriage, or civil partnership, the contributions made by the parties to the family’s welfare and the age of the applicant.

In cases where the applicant is a child or step-child of the deceased, the court will also consider the manner in which the applicant is being, or is expected to be, educated or trained. With step-children, the court will further look at the extent to which the deceased had taken on responsibility for the child’s maintenance, whether any other person had a duty to maintain the child and whether the deceased, in taking responsibility for the child, was aware that she/he was not the natural parent.

In cases where a claim is brought by a person being maintained by the deceased at the time of his death, the court will look at the extent to which, and the basis upon which, the deceased began maintaining the applicant and the length of time for which he had done so.

Clearly, these factors, and paragraph (g) in particular, give the court a very wide discretion in deciding cases. Two different judges could reach very different conclusions about the same case, and still be quite correct in their interpretation of the law. If you are considering making an application under the Inheritance Act, you must bear in mind that much will turn on the subjective view taken by the individual judge in your case.

7. The Procedure

The procedure for Inheritance Act applications is governed by the Civil Procedure Rules. These are designed to assist litigants and to ensure that all cases are run as efficiently as possible, without incurring unnecessary legal costs. However, before issuing any application, your solicitor will wish to discuss with you the possibility of using a process of out of court Dispute Resolution (DR). This may involve mediation or ‘round table’ negotiations, and is intended to assist the parties to reach a fair compromise, without involving the courts. Only if DR is inappropriate to your case, or is unsuccessful in settling your claim, will your solicitor advise you to issue court proceedings.

If you decide to issue proceedings, a claim form will be sent to the court, along with supporting documents where appropriate. These give details to the court of the basis of your application. Once issued, the claim and any supporting documentation will be served upon the defendants. The court will normally list a preliminary hearing, at which a number of directions may be given. These may include permission to the parties to file any evidence upon which they wish to rely, and orders to disclose any information or documents in their possession which may be relevant to the proceedings. The defendants will usually be given the opportunity to set out their arguments against your claim in a written ‘Defence’.

Once all these documents have been filed, the court may list a further hearing, which is an opportunity for the judge and the parties to check that all directions have been complied with, all relevant information has been provided, and to set a timetable to move the case forward. The exact procedure for this stage of your case will vary depending upon the details of your claim, and your solicitor will advise you about this in more detail as appropriate. It is essential that you abide by any timetable or deadlines given by the court, as failure to do so may be prejudicial to your case.

There is an ongoing duty upon the parties to continue to negotiate even after proceedings have been issued. Failure to do so may be reflected in the eventual order in relation to costs, if the matter proceeds to final hearing.

If the parties have failed to reach an agreement, and once the court is satisfied that all necessary information is available, the matter will be listed for final hearing. At this hearing, the judge will normally want all parties to give evidence, and may also want to hear evidence from any experts witnesses involved. After hearing this evidence, the judge will decide whether to make an order as outlined above.

8. Legal costs

Any agreement reached on financial provision should also provide for the payment of each party's legal costs. It is common for each party’s costs to be met from the estate of the deceased if agreement is reached, although this is not always the case. If the matter proceeds to a final hearing, then the judge will decide, after making the final orders, what orders for costs to make. This could mean that each party pays their own costs, or one party pays the other's costs.