Probate and Administration - Statutory Provision Claim (9) Flashcards
What is a statutory provision claim?
Statutory Provision Claim: Certain parties may seek reasonable provision from the deceased’s estate if they were left out or not sufficiently provided for by the deceased’s will or intestacy (Inheritance (Provision for Family and Dependants) Act 1975).
What are the claimant categories for a statutory provision claim?
Claimant Categories: There are six categories of potential claimant. A party must fall within one of these categories to claim.
(1) Spouse: The legal spouse or civil partner at the time of death (even if informally separated).
(2) Former Spouse: The former spouse or civil partner, unless they have remarried.
Exception: The court often prohibits the right to claim under a nullity or divorce order.
(3) Children: Natural and adopted children of the deceased (including adult children).
Infant: Applications by infant children are more common.
Adult: Applications by adult children are permitted, but rarely succeed (Ilott v Blue).
Factors: Courts generally require evidence of a moral obligation, disability or care sacrifice.
Caution: Courts treat these claims with caution (Re Coventry).
(4) Quasi-Children: Individuals to whom the deceased acted as parent, but legally were not (including adults).
Nature: Must be a ‘parent-child’ relation, being a step-child is not in itself sufficient (Re Callaghan).
(5) Dependents: Financial dependents of the deceased who qualify under no other category.
Dependency: Deceased substantially contributed in money or money’s worth to applicant’s reasonable needs (other than in a commercial setting).
Time of Dependency: Must have been dependent immediately prior to death, though some leeway may be provided, such as a period spent in a hospice (Jelley v Iliffe).
(6) Unmarried Cohabitants: Individuals who shared the informal role of spouse or civil partner with the deceased under the same household for 2 years immediately prior to death.
Same Household: This means living as a unit, not simply in the same building (Gully v Dix).
As Spouse: A reasonable person would regard the relationship as spousal (meaning the relation was publicly acknowledged and non-secretive). Sexual relations are not necessary.
Immediacy: A degree of permanence and commitment for 2 years, even if on-off or temporarily suspended prior to death (Gully v Dix).
What are the section 3 guidelines?
Section 3 Guidelines: Courts must adhere to the Section 3 Guidelines to determine whether to grant a claim. This considers:
(1) Balance of Needs: The needs of the claimant versus other applicants or existing beneficiaries.
(2) Obligations of Deceased: The legal and moral obligations of the deceased toward the claimant.
(3) Size of Estate: Claims are likely to fail against smaller estates (Re Coventry).
(4) Other Factors: Other factors ought to be considered.
Written Reasons: The deceased’s written reasons for excluding the applicant (Ilott v Blue Cross).
Cause of Death: Any role of the applicant in the testator’s death.
Estrangement: The extent of any prolonged estrangement between the parties.
(5) Special Guidelines: The court will also apply special guidelines for each category of claimant.
What is a limitation period for a statutory provision claim?
Limitation Period: Claims should be made no later than 6 months after the grant of representation was issued.
(1) Discovery of Grant: Applicants can request the date of grant online or by post, or make a standing search to notify them when a grant is issued (they must make a new search every 6 months).
(2) Extension of Claim: The time limit may be extended for good reason.
>If an alternative remedy exists, such as a claim in negligence against a solicitor, extension will be prohibited (Re Salmon).
(3) Protection of PRs: PRs will be protected from personal liability after 6 months of grant, so should not distribute the estate prior to then.
How is a statutory provision order decided?
Size of Provision
Size of Provision: The size of a successfully awarded provision will differ by the type of claimant.
(1) Spousal Standard: Spouses and former spouses can seek reasonable provision for all circumstances of their life (meaning beyond mere maintenance costs). This should reflect a divorce settlement.
(2) Ordinary Standard: Other claimants can seek reasonable provision for their maintenance needs only, meaning a sum representing daily living expenses at their current standard of living, unless they can afford it themselves.
If a statutory provision order is made, what is the source of the provision?
Source of Provision: Courts can order the provision to be made from the net estate in instalments, transfer of assets, or lump sum. This includes:
(1) Death Estate: The property owned on death, including jointly owned assets.
(2) Lifetime Gifts: The court can order assets gifted in the 6 years prior to death, provided they were made to eschew a statutory provision claim.
(3) Burdened Party: Courts must make a declaration identifying the beneficiary or party who suffers the burden of the remedy, requiring them to redirect some of their inheritance to the applicant.
What effect does a statutory provision order have on inheritance tax?
Effect on Inheritance Tax: The altered disposition could affect the IHT liability of the deceased. It may have to be recalculated, and payments adjusted accordingly.
