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Is your Estate or Will at risk of a claim?

Abha Pandya | Brighton Solicitor | Griffith Smith Farrington Webb

9th August 2017

When advising clients on their wills, asking questions of them which would reveal whether there is anyone excluded from their wills, who is a dependent, is essential. Those individuals who are actually first, dependent on the deceased and second are a spouse, civil partner, child, treated as a child or otherwise maintained by the deceased are highly likely to succeed in an inheritance act claim if they are not provided for, and likely to succeed if that provision is inadequate.

Ilott v Blue Cross and the latest case of Nahajec v Fowle remind us claimants who satisfy the second criterion above but are not dependents may nonetheless succeed in a claim. The question is one of reasonable financial provision and this is a value judgment for the judge before whom the claim ends up. It is therefore risky for clients to exclude those who may be a spouse, civil partner, child etc. (section 1 of the Inheritance Act 1975).

Nahajec is also authority that a note or letter of wishes explaining why someone is omitted is not always sufficient. Whilst such a note is helpful, if the explanation given in that note is found to be based on the deceased’s mistaken view of circumstances, then the Court  will not give as much weight to the deceased’s wishes and feelings.

It has to be underlined that this is a High Court decision and the Supreme Court decision in Ilott v Blue Cross did hold that such claims are value judgments and so it would have also been perfectly appropriate for the lower courts to hold that in Ilott, Ms Jackson was not entitled to reasonable provision from her mother’s Estate.

The key is whether there has been reasonable financial provision and this is judged by reference to the factors under section 3(1):

  • The financial resources and needs of the applicant at present and in future;
  • The financial resources and needs of any other applicant in the present or in the future;
  • Financial resources and needs of any beneficiary of the estate in the present and in the future;
  • Any obligation or responsibility owed by the deceased under Section 2 of the Act or toward the beneficiary of the Deceased (for example settlement already agreed);
  • The size and nature of the estate;
  • The physical or mental disability of the applicant and any beneficiary of the estate;
  • (g) any other matter, including the conduct of the applicant and any other person, which in the circumstances of the case the Court may consider relevant’.

Nahajec v Fowle concerns an Inheritance Act 1975 claim in the County Court at Leeds where a factually similar case to Ilott v Blue Cross & Others (2017) UKSC 17 was heard by a Circuit Judge. His Honour Judge Saffman handed down his judgment on 18 July 2017, making an award in the claimant’s favour.

His Honour Judge Saffman briefly set out those circumstances wherein the Court would intervene citing sections 1-3 of the Act.  He reiterated the Supreme Court’s position that just reasonable financial provision is objective rather than ‘simply whether the deceased behaved reasonably or otherwise in leaving the Will as he did’.  His Honour Judge Saffman then went through the case authorities in the area including the standard cases such as In re Dennis deceased (1981), In re Coventry (1980), Re Hancock (1998). It is this latter case of Hancock which refers to a moral obligation that may arise even in those cases where a child is able to earn their own living. In essence the Court needs to balance competing interests when considering whether reasonable financial provision has been made, by reference to section 3(1).

On analysing the case by reference to Section 3 (1) (g), the Judge accepted the evidence of the Claimant that she worked as a retail assistant and then did some paid hours at a veterinary surgery, but with unpaid work also at the veterinary surgery with a name to becoming a veterinary nurse.  She had various qualifications in food hygiene and a licence to serve alcohol.  She was not pushed in evidence on the point of whether she could have been doing a different job that would have earned her more money.  Of the other individuals who could make a claim against the estate, her half-brother was not making a claim and the other brother had had his claim set at £22,000 plus his costs.  A beneficiary of the estate was the defendant and the defendant alone and he had run into considerable difficulties with his business.

The next consideration for the Court was whether there were any obligations owed by the Deceased to either the Claimant or the Defendant (his daughter and the beneficiary of his estate), and the defendant accepted that there was no obligation towards him, and the Judge also observed that the Deceased did not owe an obligation towards the Claimant simply because she was his daughter.  The estate here in question was £264,279 in value and there had been the claim settled of the other child of the deceased at £22,000 plus his costs.  Once again, the key provision under the Act for the Court was the provision under Section 3 (1) (g).

His Honour Judge Saffman observed that the deceased, although he had left a note stating that he did not wish his children to benefit because he had not seen them for a long period of time, he also did not wish them to benefit because they were ‘sufficiently independent of means not to require any provision from me’.  The Claimant had already given evidence that she had attempted to have a relationship with her father, and that she had consistently tried to rekindle it.  The note from her father which said otherwise did not rebut this evidence, as he was not clear on the period of time that had elapsed since their last contact, initially thinking that it was 25 years and then amending it in his own hand to 18 years.  The Judge also found that the description of the Claimant’s financial position by the deceased was inaccurate:

                “since it seems incontrovertibly that the Claimant who was not leading an extravagant

                lifestyle was only making ends meet by taking out loans, some of which were pay day loans

                on the basis that that was all she could get, it is difficult to see how this description could

                sensibly be applied to her”.

His Honour Judge Saffman observed that these were value judgements that had to be made by a Judge taking into account all the relevant factors.  In his view reasonable financial provision was not made for the Claimant and then the perhaps more difficult question of quantum, the value of the claim arose.  The Claimant initially sought approximately £80,000 but as an award has to be reflective of a capitalised sum rather than a lump sum, and due to the large part of the Claim consisting of maintenance costs for the period of two years from the date of the Judgement, the Judge settled on the figure of £30,000, approximately 11.3% of the value of the estate.

For those individuals who are omitted from Wills, this decision provides some comfort that they may have a remedy even where there is an estrangement with the deceased.  However, it must emphasised that the awards made in Ilott and Nahajec are highly fact sensitive and not an indication that the Courts will disregard the wishes of the deceased without a sound basis.

There may be some solace in the fact that both Ilott and Nahajec, the awards are relatively low in real terms as well as a percentage of the estate.  Thus, although it may not be what the testator wishes, he may be able to mitigate against the risk of a claim by making a provision for the individual of an amount of approximately 10% to 15% of the value of his estate, and combining this with a forfeiture clause that the individual will lose that sum should they proceed to Court.

If you have any concerns about whether your estate may be at risk of a claim or how best to prepare your Will in light of this decision, we recommend that you speak to a legally qualified adviser who may be best placed to advise on these sorts of cases, particularly as each individual circumstance will have a potentially different outcome in the Courts.

If you would like to discuss your matter further, please contact Abha Pandya on 01273 324041 or email a.pandya@gsfwsolicitors.co.uk


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