Family Provision and Post- death Variations

Question 1

Where must the deceased have been domiciled for the Inheritance (Provision for Family and Dependants) Act 1975 to apply?

Answer 1

The deceased must have died domiciled in England and Wales.

Question 2

What are the categories of applicants for the 1975 Act?

Answer 2

The spouse or civil partner of the deceased.

A former spouse or civil partner of the deceased who has not remarried.

A child of the deceased (whatever the child’s age).

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.

Any person who, immediately before the death of the deceased, was being maintained
by the deceased either wholly or in part.

Any person who, during the whole of the period of two years ending immediately before
the date when the deceased died, was living in the same household as the deceased, and as the husband, wife or civil partner of the deceased.

Question 3

What usually prevents a former spouse from making a claim under the 1975 Act?

Answer 3

The divorce court often orders that the former spouse cannot claim family provision against the other spouse’s estate.

Question 4

Who does a child of the deceased include?

Answer 4

Adopted children but not step-children.

Question 5

What are the special circumstances that will be considered for claims made by an adult child in gainful employment?

Answer 5

Whether a moral obligation was owed by the deceased.

Whether the adult child has a disability

Whether the adult worked for the deceased for many years for a low wage.

Whether the child made sacrifices in order to care for the deceased.

Question 6

How does the 1975 Act provide that a person is ‘maintained’ by the deceased?

Answer 6

If the deceased was making ‘a substantial contribution in money or money’s worth towards the
reasonable needs of the applicant otherwise than for full valuable consideration pursuant to an arrangement of a commercial nature’.

Question 7

Must the timing of the maintenance be immediately before death?

Answer 7

No, a temporary break in maintenance immediately prior to death does not prevent a claim.

Question 8

What is meant by ‘living in the same household’?

Answer 8

If two people are tied by their relationship.

The tie of that relationship may be made manifest by various elements, not simply their living together under the same roof, but the private and public acknowledgment of the mutual protection and support that binds them together.

Question 9

How is it determined that an applicant and a deceased lived together as if they were spouses or civil partners?

Answer 9

By looking at whether a reasonable person with normal perceptions would regard them as living together as husband and wife or civil partners.

The relationship as a couple must be openly acknowledged.

There has to be some degree of permanence and commitment in the relationship.

Question 10

Does a temporary separation disqualify a cohabitant from satisfying the condition that they and the deceased lived together for the two years immediately before death?

Answer 10

No.

Question 11

What is the time limit for a claim under the 1975 Act?

Answer 11

Applications must be made within six months from the date of the grant of representation, however, the application can be made before the grant is issued.

Question 12

How can a potential applicant under the 1975 Act discover whether a grant has already been issued?

Answer 12

They can make an online or postal search of the probate records or they can make a ‘standing search’ which ensures that the applicant is notified of any grant which issues in the following six months.

Question 13

What will the court consider when exercising its discretion to extend the time limit for a family provision application?

Answer 13

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.

Question 14

What is the ground that must be satisfied for a claim under the 1975 Act?

Answer 14

That the deceased did not objectively make reasonable financial provision for the applicant.

Question 15

What are the two standards for judging reasonable financial provision?

Answer 15

The surviving spouse standard.

The ordinary standard.

Question 16

What is the surviving spouse standard?

Answer 16

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’.

Question 17

What is the ordinary standard for judging reasonable financial provision?

Answer 17

It applies to all other categories of applicants except surviving spouses/ civil partners and allows such financial provision as it would be reasonable in all the circumstances for the applicant
to receive for his maintenance.

Question 18

How is maintenance defined in the ordinary standard for judging reasonable financial provision?

Answer 18

Payments which enable the applicant to discharge the cost of their daily living at whatever standard of living is appropriate to them.

It does not extend to any or everything which it would be desirable for the applicant to have.

Question 19

What is the limitation to maintenance in the ordinary standard for judging reasonable financial provision?

Answer 19

An applicant who is able to pay for their living expenses out of their own resources will not obtain an award.

Question 20

What are the common guidelines that assist the court in determining whether the will and/ or intestacy makes reasonable financial provision for the applicant?

Answer 20

The financial resources and needs of the applicant, other applicants, and beneficiaries of
the estate now and in the foreseeable future;

The deceased’s obligations (including legal and moral obligations) towards any applicant or beneficiary;

The size and nature of the estate;

The physical or mental disability of any applicant or beneficiary;

Anything else which may be relevant, such as the conduct of the applicant.

Question 21

What are examples of ‘anything else which may be relevant’ in the common guidelines?

Answer 21

A testator may leave written reasons for excluding the applicant from their will and the court has discretion as to how much weight to attach to the reasons.

A prolonged period of estrangement between the applicant and the deceased.

The fact that the applicant killed the deceased.

Question 22

What are the special guidelines according to the different categories of applicants?

Answer 22

Where the applicant is the surviving spouse or civil partner, the court takes into account the
applicant’s age and contribution to the welfare of the family (including looking after the
home or caring for the family), the duration of the marriage or civil partnership and the likely
financial settlement if the marriage or civil partnership had ended in divorce or dissolution
rather than death.

On an application by a child of the deceased the applicant’s education or training requirements are considered.

Where the application is by a cohabitant, the court
should take account of the applicant’s age, the length of the period of cohabitation and the
contribution made by the cohabitant to the welfare of the family.

Question 23

From which part of the estate can the court make orders as to financial provision?

Answer 23

The ‘net estate’ which includes both the property which the
deceased has, or could have, disposed of by will, and the deceased’s share of any joint
property passing by survivorship if the court so orders.

Question 24

What orders for financial provision can a court make against the net estate?

Answer 24

Orders for periodical payments.

Lump sum payments.

The transfer of specific property to the applicant.

In making any order, the court will declare which beneficiary bears the burden of the order.

Question 25

How does the court counter the use of lifetime transfers to avoid a successful claim for family provision?

Answer 25

The court can void gifts made less than six years before death with the intention of defeating
a claim under the Act, so that the property in question would be included in the ‘net estate.’

Question 26

What are the three most common ways, property can be redirected by beneficiaries?

Answer 26

A lifetime gift by the beneficiary of an inheritance under a will or under an intestacy.

Post-death disclaimers.

Post-death variations.

Question 27

What are post-death disclaimers?

Answer 27

A rejection of the assets inherited under the will or the intestacy law or by survivorship.

Question 28

What is the effect of post-death disclaimers?

Answer 28

The disclaimed assets pass as though the original beneficiary had predeceased.

Disclaimers are, therefore, appropriate only if, following the rejection, the property passes to the person whom the original beneficiary intends to benefit.

Question 29

What are the limitations on post-death disclaimers?

Answer 29

A beneficiary cannot disclaim part of a gift and cannot disclaim once they have accepted a benefit from the gift.

Question 30

What does a post-death variation allow a beneficiary to do?

Answer 30

It allows the beneficiary to direct where the benefit or interest in joint property is to go and on what terms.

Question 31

Who is allowed to effect post-death variations?

Answer 31

The original beneficiary must be aged 18 or more and have mental capacity, however, if the beneficiary is not legally capable of effecting the variation, an
application could be made to the court.

Question 32

What are the court’s powers under the Variation of Trusts Act 1958?

Answer 32

The court has the power to consent for infants and people who lack capacity and cannot consent for themselves, provided the variation is for their benefit.

Question 33

What are the conditions that must be satisfied for disclaimers and variations to be read back into the will for IHT purposes?

Answer 33

They must be in writing and signed by the original beneficiary;

They must within two years of the deceased’s death; and

They must not be made for a consideration in money or money’s worth.

For variations, they must state that s.142 IHTA 1984 is to apply.

Question 34

What are the conditions that must be satisfied for disclaimers and variations to be read back into the will for CGT purposes?

Answer 34

They must be in writing and signed by the original beneficiary;

They must within two years of the deceased’s death; and

They must not be made for a consideration in money or money’s worth.

Question 35

What is the effect of a variation being ‘read back’ into the will?

Answer 35

It is as if the testator gave the legacy direct to the new beneficiary.

Question 36

What happens if more IHT is payable as a result of a variation?

Answer 36

The deceased’s personal representatives must join in the written variation.