In a recent High Court case, the Court considered whether a deceased’s wife lost the money left to her in her husband’s Will because she brought a claim under the Inheritance (Provision for Family and Dependents) Act 1975 (“the 1975 Act”).
Under the 1975 Act, where a surviving spouse or civil partner has not been reasonably provided for in a Will, they can bring a claim. However, in this case, the deceased wrote in to his Will that his wife would lose her entitlement if she brought a claim under the 1975 Act. Notwithstanding this provision, the wife decided to bring a claim under the 1975 Act after forming the view the provision left for her was insufficient.
The Judgement
In its judgement, the High Court commented that it had not been unreasonable for the husband to draft the Will as he did - to ensure that his wife received no more than the reasonable financial provision that would be awarded to her on any claim under the 1975 Act.
Additionally, the Court was critical of the conduct of the wife towards her husband in his dying months and found that the treatment he had received from her had been unwarranted.
That said, the judge noted that the question he had to ask was not whether the deceased’s intentions were reasonable, but whether the Will made reasonable financial provision for his wife, having regard to the factors set out in the 1975 Act.
These factors include:
· The financial needs and resources of the applicant;
· The standard of living enjoyed by the applicant;
· The financial needs and resources of other beneficiaries or applicants;
· Any obligations and responsibilities which the deceased had towards the applicant;
· Any Mental or Physical Disabilities; and
· Any other relevant factors.
Considering these factors, the judge found that the Will did in fact constitute reasonable financial provision for the deceased’s wife and it had been reasonable for those conditions to be attached.
The judge held that:
· In circumstances where the provision made by the Will was objectively reasonable, it was also reasonable to include a provision intended to discourage the relevant beneficiary from commencing an unwarranted claim; and that
· It would be wrong in principle to pursue a claim knowing that in doing so, they would forego a certain benefit, and then to say that, because they have foregone that benefit, the Will failed to make reasonable financial provision for that individual.
What are the Implications of the Judgement?
Whilst the judgement does highlight the court’s willingness not to immediately discount such provisions, it refrains from imposing a general restriction on pursuing action under the 1975 Act, in cases where a condition against such action exists.
Whilst it might now seem attractive to include this provision in your Will, there are some points to consider:
1. Firstly, the existing provisions were considered objectively reasonable in the first place. It will not be possible to leave a very small sum and then try to exclude a claim under the 1975 Act.
2. Secondly, the facts of this case are very unusual. The Court was particularly critical of the Claimant’s conduct in the claim and also in relation to the Deceased before he died. The likelihood of similar facts arising is slim.
3. Thirdly, this is only a High Court decision and so is persuasive but not binding. Oral permission to appeal has been rejected but there might be a further appeal in the offing.
4. Fourthly and finally, the Court did actually make an order under the 1975 Act varying the trusts on which the property is held to require the trustees to provide the Claimant with a property for life (£400,000).
Equally, a party faced with a similar provision in the Will must consider the prospects of success carefully as such a provision could make pursuing a claim particularly risky.
Co-author: Jack Matthews
