IPFDA Claims Flashcards
Under what circumstances can a solicitor provide a copy of a former client’s will to another person?
The solicitor should not provide a copy of the will to anyone, until the personal representatives provide consent. Even if the will has already been read
- must have PRs consent - otherwise risk breach of duty of confidentiality
What advice should be given to a client (writing the will) who is concerned about claims against their estate (from disgruntled individuals who do not receive under their will)?
The solicitor should advice the client to write a letter stating their decision (as to why they do not want someone to receive anything under the will), but make it clear that this is not a guarantee that no claim may be made against the estate
- claims against the estate are always a risk
- but a letter is helpful to evidence intention and indicate capacity
- advise on the risk of litigation - cannot be certain about what will happen
What happens if there is a period of discontinued maintenance right before the deceased dies?
E.g., deceased maintained a woman until three months before D’s death
The court could disregard the last three months if there is a settled basis for maintenance (the woman had been maintained for a number of years until the last three months)
- where maintenance is discontinued because of circumstances beyond the control of the deceased, the court may disregard any such period
What are eligibility criteria for IPFDA?
- be within the jurisdiction
- demonstrate they fall within a recognised category of eligible applicants
- make claim within prescribed time limit
Categories of applicant IPFDA
- Spouse / civil partner
- Former spouse / civil partner who has not remarried
- A person who has cohabited with deceased as if they were spouses for 2 years prior to death
- Child (adopted children are recognised as children of adopters)
- Any person treated by deceased as child (may include step-children)
- Any other person maintained by deceased immediately before death
What is the time limit for making a claim?
Cannot be made more than 6 months after the date of grant of representation
Grounds for making a claim
- Deceased’s will did not make reasonable financial provision for applicant; and/or
- Distribution of estate under intestacy rules fails to make reasonable financial provisions
Two stage test (what does the court consider when making an order)
- Did the deceased fail to make reasonable provision for the applicant?
- If so, what award should the court make?
Both questions require an objective assessment of the facts
What is the standard of financial provision for a spouse?
Surviving spouse standard - such financial provision as would be reasonable, whether or not that provision is required for his or her maintenance
- higher standard than maintenance standard
What is the maintenance standard of financial provision?
Such financial provision as would be reasonable in all circumstances for his/her maintenance
What are the common guidelines?
- applicant’s financial resources and needs
- financial resources and needs of any other applicants
- financial resources and needs of any beneficiary
- any obligations and responsibilities deceased had towards beneficiaries
- physical or mental disability
What are the criteria for someone to be able to make a claim?
- Be within the jurisdiction of IPFDA: D died domiciled in E+W
- Demonstrate they fall within a recognised category of eligible applicants
- Make their claim within the prescribed time limit
If a client wants to avoid litigation (avoid a claim being brought against their estate), what can they do?
Settlement options - Deed of Variation to re-direct their inheritance
What advice can be given to a client on bringing a claim / a claim being brought?
Cannot be certain on the outcome of a claim
- explain the risks of litigation
- The grounds for the claim would be that the applicant has not been ‘reasonably provided for’
- Financial position of the claimant
What evidence is required?
- Deceased’s will
- what is the financial position of the individual bringing the claim?
Questions to ask a client (bringing the claim)?
- What is their financial position?
- Were they provided for by the deceased?
- What was the family relationship?
How can litigation be avoided (how to avoid there being an IPFDA claim)?
- Explain to the client the risks of litigation
- Explain that litigation can be avoided by making pre-claim settlement offers
- re-direct inheritance by Deed of Variation
Key points to remember for IPFDA issue
- Eligibility criteria (time limit, category)
- What are the grounds for bringing a claim?
- Considerations of the court when making an order
Information/advice to understand this:
- Financial position of applicant (reasonable provision) - ask questions about their financial position
- what financial maintenance the applicant received from the deceased (financially maintained?)
- Family relationship
- Ask client what they want to do (litigate or settle - what is their ideal outcome)
- Risks of litigation
- Settlement to avoid litigation - Deed of Variation (re-direct inheritance)
- Analyse/advise on the strength of both parties’ claims (client and the other side)
Advice depends on client’s wishes - ask their feelings/ideal outcome
Negotiation position for settlement
- Consider strengths/weaknesses of both parties
- Merits of the client’s claim
- Consider costs / precise settlement offers
- Need information about the financial position of both parties and the financial dependency on the deceased
What are the three methods for post-death changes to estate distribution?
- Variation
- Disclaimer
- Precatory trust
What is a variation?
A direction from an original beneficiary, to the deceased’s PRs, to transfer property that the beneficiary is entitled to under the terms of a will or the intestacy rules to another person instead.
This can be done after an inheritance is accepted
What are the IHT consequences of variation?
The gift is treated as having been made for IHT purposes by the deceased’s will (by deceased to the new beneficiary)
- the original beneficiary does not make a PET
What are the conditions for a variation?
- Made by original beneficiary in writing (Deed of Variation)
- Within two years following the deceased’s death
- Contains an express statement by beneficiary confirming s142 applies
What is a claim under IPFDA 1975?
- Claim against the deceased’s estate
- Court order
- Contentious probate - dealt with by litigation team
- Advise client on risks of a claim
- Requirements for bringing a claim
- Court considerations when making an award
Property to which IPFDA applies
- consider which property the court can order to be distributed?
Any order is made out of the net estate:
- normal succession estate
- any property in respect of which the deceased held a general power of appointment
- any property which the deceased nominated by statutory nomination or gave by DMC
- deceased’s severable share of joint tenancy
- any other property disposed of during deceased’s life
Key questions for the client?
Non-legal:
- family relationships
- how did the applicant/client receive financial support from the deceased
- financial situation
- what does the client want? What is their ideal outcome? How do they feel about the options/strategies?
