Family provisions and post-death variations

Question 1

Ways of claiming part of a deceased’s estate (if you’re not happy with the amount of lack thereof that you have received)

Answer 1

1) Make a family provision claim
2) Challenge the validity of the will

Question 2

Inheritance (provisions for family and dependants) act (Family Provision) - What it’s used for

Answer 2

The act allows certain categories of people who may be aggrieved because they have been left out of a will or didn’t receive as much as they wanted are not inheriting on an intestacy to apply to the court for a benefit from the estate following the testator’s or intestate’s death.

Question 3

Family Provision - What you need to find out

Answer 3

1) Did the deceased die domiciled in England and Wales
2) Does the applicant fall within a category of applicant ? - What do they have to prove?
3) Did they bring the applicant within the time limit?
4) Has the will/intestacy made reasonable provision for the applicant?
5) Guidelines (common and special)
6) Court’s Powers

Question 4

Family Provision - Who can make a claim?

Answer 4

• Spouse/civil partner
• A former spouse/civil partner who has not remarried
• A child of the deceased
• Any person treated by the deceased as a child
• 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 death was living:
  In the same household as the deceased, as the husband, wife or civil partner

Question 5

Family Provision - Former Spouse - What they have to prove

Answer 5

1) That they haven’t remarried
2) That on the final order for divorce or dissolution that the court did not make an order barring them from making a claim

Question 6

Family Provision - Someone being maintained by the deceased - What they have to prove

Answer 6

1) Maintained = the deceased was making substantial contributions in money or money’s worth towards the reasonable needs of that person
2) Maintenance must not be part of a commercial arrangement
3) Financial dependency on the deceased
4) Was it a one-off payment or constant flow? - more likely to find it with a constant flow

Question 7

Family Provision - Adult Child - What they have to prove

Answer 7

If the adult child is in employment and likely to have earning capacity for the foreseeable future it is unlikely that their application will succeed without some special circumstances such as:
- A moral obligation owed by the deceased
- The adult child having a disability
- The adult child working for the deceased for many years for a low wage
- The child making sacrifices in order to care for the deceased

Question 8

Family Provision - Cohabitants - What they have to prove

Answer 8

1) They must have been living in the same household as the deceased
2) As the husband, wife or civil partner
3) This must have been for the whole of the two years immediately preceeding the deceased’s death

Question 9

Family Provision - Time limit

Answer 9

Applications must be made within 6 months from the date of the grant of representation. Court has a discretion to extend this if there is good reason for the delay

Question 10

Family Provision - Grounds for a claim

Answer 10

The only ground for a claim is:
That the disposition of the deceased’s estate effected by his will or the law relating to intestacy is not such as to make REASONABLE FINANCIAL provision for the applicant.

Question 11

Family Provision - Grounds for judging reasonable financial provision - Surviving spouse standard

Answer 11

The surviving spouse standard 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 divorce

Question 12

Family Provision - Grounds for judging reasonable financial provision - The ordinary standard (for all other applicants)

Answer 12

Allows such financial provision as it would be reasonable in all the circumstances for the applicant to receive for their MAINTENANCE. Maintenance = payments which enable the applicant to discharge the cost of their daily living at whatever standard of living is appropriate to the e.g rent and bills. A person who is able to pay for their living expenses out of their own resources will not obtain a reward

Question 13

Family Provision - Grounds for judging reasonable financial provision - Guidelines to assist the court - Common guidelines (every applicant)

Answer 13

1) Financial resources and needs of the applicant - court balances the needs of applicant against needs of other beneficiaries
2) The deceased’s obligations towards any applicant or beneficiary
3) Size and nature of the estate - easier to make a claim against a large estate
4) The physical or mental disability of any applicant or beneficiary
5) Anything else which may be relevant - if testator leaves written reasons for excluding the applicant or a prolonged period of estrangement

Question 14

Family Provision - Grounds for judging reasonable financial provision - Guidelines to assist the court - Special guidelines - Surviving Spouse

Answer 14

Court takes into account:
1) Applicant’s age
2) Applicant’s contribution to the welfare of the family (looking after family home or caring for family)
3) Duration of marriage
4) Likely financial settlement if the marriage or civil partnership had ended in divorce

Question 15

Family Provision - Grounds for judging reasonable financial provision - Guidelines to assist the court - Special guidelines - Child

Answer 15

Court will take into consideration:
1) Applicant’s education or training requirements

Question 16

Family Provision - Grounds for judging reasonable financial provision - Guidelines to assist the court - Special guidelines - Cohabitant

Answer 16

Court will take into account:
1) Applicant’s age
2) Length of the period of cohabitation
3) Contribution made by the cohabitant to the welfare of the family

Question 17

Family Provisions - Courts powers

Answer 17

The court has wide powers to make orders against the ‘net estate’ of the deceased including: 1) orders for periodical payments
2) lump sum payments 3) the transfer of specific property to the applicant.
The ‘net estate’ against which an order can be made includes not only property which the deceased has, or could have, disposed of by will, but also the deceased’s share of joint property passing by survivorship if the court so orders

Question 18

Post death variations and disclaimers - Definition

Answer 18

Despite the terms of the will or the operation of the intestacy rules after a person dies it is possible for the beneficiaries to alter what happens to the estate.

Question 19

Post death variations and disclaimers - Situations in which this might happen

Answer 19

1) A beneficiary may feel that a member of the family has been unfairly excluded or needs a larger legacy.
2) Adult beneficiaries may decide that they would prefer their legacy to go to their children.
3) They want to pay less IHT or CGT

Question 20

Post death variations and disclaimers - How can property be re-directed?

Answer 20

1) Lifetime gift by the beneficiary
2) Post-death disclaimer
3) Post-death variations

Question 21

Post death variations and disclaimers - How can property be re-directed? - Lifetime gift

Answer 21

A lifetime gift by the beneficiary of an inheritance under a will or under an intestacy to someone else

Question 22

Post death variations and disclaimers - How can property be re-directed? - Post-death disclaimers

Answer 22

Disclaimers amount to a rejection of the assets inherited under the will or the intestacy law or by survivorship. The disclaimed assets then pass as though the original beneficiary has predeceased. Disclaimers are only appropriate if following rejection the property passes to the person whom the original beneficiary intends to benefit. You CAN’T disclaim if you’ve already received any benefits

Question 23

Post death variations and disclaimers - How can property be re-directed? - Post-death variations

Answer 23

The restrictions on disclaimers don’t apply. A beneficiary can direct where the benefit is to go and on what terms. The original beneficiary re-writes the deceased’s will or intestacy rules. They can also be used to redirect the deceased’s interest in joint property which passes by survivorship. Must be 18.

Question 24

Post death variations and disclaimers - Post-death variations - Read Back - Definition

Answer 24

To overcome the taxation problem variations are allowed to be ‘read back’ into the will - treated as though the deceased gave the property direct to the new beneficiary. Certain conditions must be met.

Question 25

Post death variations and disclaimers - Post-death variations - Read back - Conditions

Answer 25

The conditions are that the disclaimer/variation: 1) Is in writing and signed by the original beneficiary
2) Is within 2 years of the deceased’s death
3) Is not made for a consideration in money or money’s worth