Confused about inheritance claims?
There have been lots of ostensibly conflicting decisions in this area of law in the past few years and a lot of publicity around these claims. The aim of this article is to answer some key questions and correct some common misunderstandings and guide you through making or mitigating an inheritance claim.
What are Inheritance Act claims?
The Inheritance Act is actually the Inheritance (Provision for Family and Dependants) Act 1975 although claims under this act are generally referred to as Inheritance Act claims.
The Act gives certain people the right to apply to the court for an order against the estate of a deceased person, if the deceased estate fails to make reasonable financial provision for him/her.
Essentially, this means that where a person falling within these categories receives nothing or less than they believe they ought to, either under the will of the deceased or the intestacy rules, they can apply to the court to request that they receive something from the estate.
Who can bring an Inheritance Act claim?
The following people can bring a claim:
- Spouse or civil partner of the deceased;
- Former spouse or civil partner of the deceased (who has not subsequently remarried or entered into a civil partnership);
- A child of the deceased;
- A person who was treated by the deceased as a child of the family e.g. a stepchild;
- A person (other than the above) who was being maintained, either wholly or partly, by the deceased immediately before they died;
- A person who was living in the same household as the deceased, as their spouse or civil partner, for the two years immediately before they died.
If you fit into one of these categories, you may be able to bring a claim, but anyone considering pursuing a claim should consider their position carefully and take advice before doing so.
A claim will only be successful where the distribution of the deceased’s estate fails to make reasonable provision for the claimant. If reasonable provision is made (more on this below), a claim will not be successful and the claimant could waste time and cost pursuing a claim.
What is reasonable? And how much is the court likely to award?
These are questions that are difficult to answer particularly in light of recent case law.
What is reasonable depends on all the circumstances including what type of person is bringing the claim.
In applications by the spouse or civil partner of the deceased, the provision must be reasonable for a husband or wife to receive in all the circumstances.
In all other cases, the provision must be what is reasonable for the claimant to receive for his or her maintenance.
Broadly speaking, with the exception of cases involving a husband or wife, the court will not award an applicant a windfall but rather only what is required to discharge their daily living costs at the standard that is appropriate.
Recent case law suggests that the court is becoming increasingly reluctant to interfere with the way people choose to dispose of their property.
In the much written about case of Ilot v Mitson, in which a mother left her £486,000 estate to charity rather than her estranged daughter, the Supreme Court ultimately upheld the first court’s decision to award the claimant £50,000.
The court will consider all the circumstances in coming to a decision, including the financial resources of the applicant, the financial resources of any beneficiary and the size of the estate.
How to bring an Inheritance Act claim?
Before bringing a claim, it is sensible to take advice about the merits of the claim and the potential value of the estate in question.
Additional or alternative claims may also be available, such as a claim in relation to the validity of the underlying will.
How can you avoid claims against your estate?
The potential for claims to be made will depend on the circumstances and what is being left, to whom and for what reason.
In order to minimise the risk of claims, it is sensible to take advice about your will and the way your estate will be distributed.
In addition, the wishes and reasoning of the deceased will be taken into account so it is useful to include a separate letter of wishes, outlining the reasoning behind any distributions which deviate from what might be expected.
To speak to someone about making or reviewing your will, please contact Julie Garbutt using [email protected] or 0191 211 7863.