IPFDA 1975: Changes to the estate and distribution following death

Question 1

why would someone consider an application to the court under IPFDA?

Answer 1

If an individual believes that ‘reasonable financial provision’ was not made for them under the deceased’s will OR by operation of the intestacy rules, then they can apply to the court which has the power to make such provision for them out of the deceased’s estate

Question 2

what does IPFDA stand for?

Answer 2

Inheritance (Provision for Family and Dependants) Act 1975

Question 3

what are the 3 requirements to be eligible to make an IPFDA claim?

Answer 3

1. deceased died domiciled in E&W (so the court has jurisdiction)
2. applicant is in a recognised category of applicants
3. application made in the time limit

Question 4

what are the recognised category of applicants under IPFDA? (6)

Answer 4

1. spouse/CP
2. former spouse / CP who has not remarried / subsequent CP
3. a person who cohabited with the deceased for 2 years before death as if they were spouses / CP
4. a child of deceased (includes children adopted by deceased, but not children of deceased who were adopted by someone else)
5. a person who was treated as a child of the family (including step-child)
6. a person who was maintained wholly or partly by deceased immediately before death

Question 5

what does a person who was ‘maintained’ by the deceased entail?

Answer 5

• maintained by deceased = substantial voluntary contributions in money’s worth towards reasonable needs of the applicant
• not part of a commercial agreement
• emotional support is insufficient
• does not need to be immediately before death if maintenance is discontinued due to reasons beyond the deceased’s control - eg, suffered stroke and stopped making payments to A 3 moths before death –> A can still apply

Question 6

what is the time limit for claiming under IPFDA?

Answer 6

deadline is 6 months after grant of representation is issued

application can be made before/after grant is issued

Question 7

can an applicant make an IPFDA application after the deadline expires?

Answer 7

the court has discretion to extend the time limit

BUT the onus is on the applicant to show special reasons to extend and that they have an arguable case

the court considers:
- reasons for delay
- any attempts at negotiation within the time limit
- whether the estate is already in the process of distribution
- whether refusal leaves the applicant without recourse against anyone

Question 8

which court should the applicant make an IPFDA claim in?

Answer 8

choice of High Court (Fam or Chancery Divisions) or County Court

Question 9

what is the ground for making IPFDA claim

Answer 9

the deceased’s will or intestacy rules do not make REASONABLE FINANCIAL PROVISION for the applicant

Question 10

how does the court assess claims under IPFDA?

Answer 10

Court determines if reasonable financial provision is made for the applicant by considering:

• what standard of financial provision will apply to the applicant? (surviving spouse standard or maintenance standard)
• and assess if the standard was met with reference to the section 3 guidelines = common guidelines apply to all applicants and specific guidelines apply to specific categories of applicants
• if the court finds that reasonable financial provision has not been made, it decides on the form and quantum of the award (also having regard to the guidelines)

Question 11

what is the surviving spouse standard of reasonable financial provision?

who does it apply to?

Answer 11

• Surviving spouse standard = financial provision that is reasonable for the spouse/CP to receive regardless of whether or not it is required for their maintenance
• applies to surviving spouses / CPs and court has discretion to apply the surviving spouse standard to former spouses if:

1. former spouse did not re-marry, AND
2. if divorce / dissolution was 12 months before death, AND
3. no order for financial provision was made in divorce, dissolution, annulment, or judicial separation proceedings

Question 12

what is the non-surviving spouse standard for reasonable financial provision?

Answer 12

• maintenance standard = financial provision that is reasonable in all the circumstances for the applicant to receive for their maintenance
• maintenance = consider what is reasonable for the applicant to live on without luxury or poverty
• this is not the same as the actual standard of living that the applicant enjoyed during D’s lifetime (but this is a relevant consideration)

Question 13

what are the common guidelines that the court must consider for all categories of applicants? (7)

Answer 13

1. A’s financial resources and needs now and in foreseeable future
2. financial resources and needs of other As now and in foreseeable future
3. financial resources and needs of Bs now and in foreseeable future
4. obligations and responsibilities that deceased had towards As or Bs
5. size and nature of estate
6. physical or mental disability of As or Bs
7. any other matter the court finds relevant eg, conduct of A or other persons

Question 14

what are the specific guidelines that the court must consider for spouses / CPs? (3)

Answer 14

1. A age and duration of marriage
2. contribution by A to welfare of deceased’s family (including by looking after the home or caring for the family)
3. the provision A might have reasonably expected to receive in divorce if divorce happened at date of death (not 50% - there is no presumption of a clean break

Question 15

what are the specific guidelines that the court must consider for former spouses / CPs? (3)

Answer 15

1. A age and duration of marriage
2. contribution by A to welfare of deceased’s family (including by looking after the home or caring for the family)

if the court applies the surviving spouse standard, it also considers:

3. the provision A might have reasonably expected to receive in divorce if divorce happened at date of death (not 50% - there is no presumption of a clean break

Question 16

what are the specific guidelines that the court must consider for cohabitees? (2)

Answer 16

1. A’s age and length of cohabitation
2. contribution by A to welfare of deceased’s family (including by looking after the home or caring for the family)

Question 17

what are the specific guidelines that the court must consider for a child or a person treated as a child? (5)

Answer 17

1. whether D maintained A, on what basis, how long, and the extent of their contribution
2. if deceased assumed responsibility for A’s maintenance
3. liability of any other person to maintain A
4. the manner A was or expects to be educated/trained
5. whether D maintained or assumed responsibility for maintaining A knowing A was not their child

Question 18

what are the specific guidelines that the court must consider forother applicants financially maintained by deceased? (3)

Answer 18

1. length and basis that D maintained A
2. extent of contribution
3. if deceased assumed responsibility for maintaining A

Question 19

how will the court assess what type of order it will make, after it has decided that no reasonable financial provision has been made for the applicant?

Answer 19

the court will consider:
1. quantum = how much should A receive
2. form of award = what type of order to make

the process of assessing the above is objective and will be based on financial evidence - e.g., list of A’s current and future assets and liabilities

Question 20

what are the types of orders the court can make under IPFDA? (8)

Answer 20

types of awards:

(1) periodical payments

(2) lump sums

(3) transfer of property

(4) settlement of property

(5) acquisition of property from someone for transfer to A

(6) variation of marriage/CP settlements

(7) variation of trusts on which the deceased’s estate is held - e.g., A is a beneficiary of a discretionary trust under D’s will and this is not enough so court can vary trust

(8) giving A a life interest rather than capital interest eg, if A only wants to live in family home during lifetime or deceased has other children that court gives reversionary interest to

Question 21

if the court makes an order under IPFDA, when is property deemed given to applicant?

Answer 21

• deemed given on date of deceased’s death
• orders are read back for tax reasons as if the deceased made the disposition at date of death

Question 22

what property of the deceased can an order made under IPDFA apply to? (5)

Answer 22

the ‘net estate’ including =

1. succession estate
2. property that deceased gave by DMC or statutory nomination
3. deceased’s share in joint tenancy if severed (note: this is part of the net estate only if the court orders this)
4. any other property disposed of during deceased’s lifetime that is available via anti-avoidance powers
5. any property the deceased held a general power of appointment over which has not been exercised