Changes to Estates Following Death

Question 1

To whom does the Inheritance (Provision for Family and Dependants) Act (“IPFDA”) 1975?

Answer 1

People who died domiciled in England and Wales.

IPFDA 1975 — s. 1(1).

Question 2

What are the Three Types of Domicile?

Answer 2

• Domicile of Origin: This is determined at birth and is based on the father’s domicile if the parents were married or the mother’s if they were not.
• Domicile of Dependency: If the relevant parent changes domicile, so does the domicile of children under 16.
• Domicile of Choice: Sever all ties with their domicile of origin, e.g. by emigrating with the intention of never returning to the UK.

Question 3

What are the Categories of Applicants under the IPFDA 1975?

Answer 3

• A spouse or civil partner.
• A former spouse or civil partner who has not remarried or formed a subsequent civil partnership.
• A person who cohabited with the Deceased as if they were spouses or civil partners for two years prior to their death.
• A child of the Deceased.
• Any person who was treated by the Deceased as a child of their family, i.e. step-children.
• Any other person who was financially maintained (wholly or partly) by the Deceased immediately before their death.

IPFDA 1975 — s. 1(1)(a)-(e).

Maintenance implies substantial, non-commercial, contributions in money or money’s worth towards the reasonable needs of the person.

Question 4

What is the Time Limit for an IPFDA Application?

Answer 4

Six months from the Grant of Representation.

IPFDA 1975 — s. 4.

Question 5

To what Property does the IPFDA 1975 apply?

Answer 5

The Deceased’s Net Estate, which includes:
* The Succession Estate;

• Any property that the Deceased held a general, unexercised power of appointment in respect of;
• Any property that the Deceased nominated any person to receive;
• Any property that is beneficially held in joint tenancy;
• Any property that:
  • Within six years of death;
  • Is transferred by a disposition with the intention of defeating an application for financial provision;
  • Without providing full valuable consideration to the counterparty; and that
  • The court believes a reversal thereof would provide appropriate financial support to the Applicant.

IPFDA 1975 — s. 25.

Question 6

What are the Grounds for making an Application under IPFDA 1975?

Answer 6

• The Deceased’s Will did not make reasonable financial provision for the Applicant; and (or) that
• The distribution of the Deceased’s Estate under the Intestacy Rules fails to make reasonable financial provision for the Applicant.

IPFDA 1975 — s. 1.

The courts will consider the competing interests of the Applicant and intended Beneficiary, as well as the original wishes of the Testator.

Question 7

If an Application is successful, what may the Court order?

Answer 7

• Periodical payments.
• Lump sum.
• Transfer of property.
• Settlement of property.
• Acquisition of property for transfer.
• Variation of marriage settlements.
• Variation of civil partnership settlements.
• Variation of the trusts on which the Deceased’s Estate is held.

IPFDA 1975 — s. 2(1).

Question 8

How do the Courts determine whether the Testator made Reasonable Financial Provision?

Answer 8

By asking:
* What provisions would have been reasonable for the Testator to make in this context; and if none can be found

• What award should the Court make?

IPFDA 1975 — s. 3.

Question 9

How does the Class of Applicant influence whether the Testator’s Financial Provisions are considered Reasonable?

Answer 9

Spouses and Civil Partners enjoy a higher standard than all other Applicants, namely because it goes beyond maintenance.

IPFDA 1975 — s. 1(2).

Question 10

When may the Court extend the Surviving Spouse Standard?

Answer 10

• The Applicant is a former spouse or civil partner who has not moved on or a spouse who is judicially separated;
• Divorce, dissolution, nullity or judicial separation occurred within 12 months of death; and
• No order for financial provision was made in the relevant proceedings.

IPFDA 1975 — s. 14.

Question 11

In assessing Reasonableness, what must the Court consider?

Answer 11

• The financial needs and resources of all Applicants and Beneficiaries of the Estate, including physical and mental disabilities.
• The Deceased’s obligations and responsibilities toward any Applicants or Beneficiaries.
• The size and nature of the Deceased’s Net Estate.
• Any other matter the Court considers relevant.

IPFDA 1975 — s. 3(1).

Question 12

In assessing Reasonableness, what must the Court further consider in the case of a Spouse or Civil Partner?

Answer 12

• The Applicant’s age.
• The recognised relationship’s duration.
• The contribution made by the Applicant to the welfare of the Deceased’s family, financial or otherwise;
• The provisions the Applicant may reasonably be expected to receive in divorce or dissolution proceedings if the couple were separate at death.

The Court considers the first two criteria for former spouses, former civil partners too, and cohabitees. The third applies if the Court choose to apply the Surviving Spouse Standard.

Question 13

In assessing Reasonableness, what must the Court further consider in the case of a Child?

Answer 13

Education or training.

This also applies if the Applicant was merely treated as a child of the Deceased.