7. Family Provision and Post-Death Variations

Question 1

Categories of applicants under the I(PFD)A 1975

Answer 1

1. the spouse or civil partner of the deceased;
2. a former spouse or civil partner of the deceased who has not remarried
3. a child of the deceased (whatever the child’s age);
4. any person treated by the deceased as a child of the family in relation to any marriage or civil partnership of the deceased, or otherwise in relation to any family in which the deceased at any time stood in the role of a parent (eg a step- child or child of a cohabitee);
5. any person who, immediately before the death of the deceased, was being maintained by the deceased either wholly or in part.
6. any person who, during the whole of the period of two years ending immediately before the date when the deceased died, was living
   
   1. in the same household as the deceased, and
   2. as the husband, wife or civil partner of the deceased.

Question 2

When will a former spouse or civil partner be barred from making a claim under the I(PFD)A 1975?

Answer 2

where, on the making of the final order of divorce/dissolution or nullity, the court made an order barring the former spouse or civil partner from making a claim

Question 3

What does it mean to say that the deceased was ‘maintaining’ another individual?

Answer 3

A person is ‘maintained’ if ‘the deceased was making a substantial contribution in money or money’s worth towards the reasonable needs of that person, other than a contribution made for full valuable consideration pursuant to an arrangement of a commercial nature’;

Question 4

Time Limit for making I(PFD)A claim?

Answer 4

Applications must be made within six months from the date of the grant of representation

Question 5

Can the time limit for making a I(PFD)A claim ever be extended?

Answer 5

Yes if the court considers that there is good reason
- Considering the merits of the applicant’s claim for provision, how promptly the applicant sought permission, whether the estate has already been distributed, whether the personal representatives or
beneficiaries had notice within the time limit of a possible claim and whether the applicant would have another remedy if permission were refused (such as suing their solicitor in negligence).

Question 6

Ground for I(PFD)A Claims:

Answer 6

‘the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or a combination of his will and that law, is not such as to make reasonable financial provision for the applicant’

Question 7

Who has the burden of proving that adequate financial provision was not provided by the deceased in a I(PFD)A claim?

Answer 7

The applicant must show
- financial provision which is reasonable is determined objectively

Question 8

Two standards for judging whether a reasonable financial provision was provided by the deceased in an I(PFD)A claim:

Answer 8

1. Surviving Spouse Standard
2. Ordinary Standard

Question 9

I(PFD)A Claims: Surviving Spouse Standard

Answer 9

allows a surviving spouse or civil partner such financial provision as is reasonable in all the circumstances ‘whether or not that provision is
required for his or her maintenance’. A relevant factor is how much the spouse or civil partner might have expected on a divorce.

Question 10

I(PFD)A Claims: Ordinary Standard

Answer 10

Applies to all categories of applicant besides surviving spouse: allows ‘such financial provision as it would be reasonable in all the circumstances… for the applicant to receive for his maintenance’
- A person who can pay for their living expenses out of their own resources will not obtain a reward
- would have to show some kind of special moral obligation in this case

Question 11

I(PFD)A Claims: How can an applicant (not spouse / civil partner) who has the means to pay for their maintenance make a successful claim?

Answer 11

Must prove that the deceased had some special moral obligation towards them

Question 12

Common guidelines the court takes into account when assessing I(PFD)A Claims

Answer 12

1. financial resources and needs of applicant and beneficiaries of estate
2. deceased’s obligations towards applicants / beneficiaries
3. size / nature of estate
4. physical or mental disability of applicant / beneficiary
5. anything else relevant such as conduct

Question 13

Special guidelines the court will consider for a surviving spouse / civil partner applying under I(PFD)A

Answer 13

court considers age and contribution to the family, duration of marriage and likely financial settlement had divorce occurred

Question 14

Special guidelines the court will consider for a child applying under I(PFD)A

Answer 14

Applicant’s education and training requirements considered

Question 15

Special guidelines the court will consider for a cohabitant applying under I(PFD)A

Answer 15

Age, length of period of cohabitation and contribution to the welfare of the family

Question 16

Scope of the orders a court could make to satisfy a I)PFD)A claim?

Answer 16

1. Anything in net estate: all property deceased has or could have disposed by will AND deceased’s share of joint property passing by survivorship (if appropriate)
2. Court can potentially avoid gifts made less than 6 before before death (including this property in the net estate) if the transfer was made in an attempt to avoid a claim under the act

Question 17

Options for a beneficiary wanting to alter what happens to estate if they feel a family member has been excluded:

Answer 17

1. Make a lifetime gift of their inheritance
2. Post-death disclaimer
3. Post-death Variation

Question 18

Effect of a post-death disclaimer

Answer 18

Disclaimers are a rejection of assets inherited by will, intestacy, or by survivorship

• If this happens, assets pass as if the beneficiary had predeceased
• So this only makes sense if in doing so, it would pass to the person they want to benefit (ie. the residuary beneficiary)

Question 19

Post-death variations: Effect

Answer 19

A beneficiary who varies a benefit can direct where benefit is to go and on what terms.
- This can also be used to redirect deceased’s interest in joint property passing by survivorship
- Original beneficiary who is trying to vary the will must be 18 or older with mental capacity (if not, application can be made to the court, and will be granted if it is for this person’s benefit)

Question 20

If a beneficiary who wants to vary a will is under 18, can they still apply to have it varied?

Answer 20

Yes they must apply to the court which will grant it if the variation is for their benefit

Question 21

Requirements for a variation or disclaimer to be ‘read back’ to deceased’s death:

Answer 21

1. Must be in writing and signed by original beneficiary
2. Must be within 2 years of the deceased’s death; and
3. must not be made for a consideration in money / money’s work
4. Variations must state that s 142 IHTA 1984 is to apply
5. If the effect of the variation is that more IHT is payable on the estate, the signatures of the PRs are also required

Question 22

Implications of having a variation / disclaimer read back into the will:

Answer 22

1. Avoid additional IHT
2. Avoid additional CGT which would come from transfer