Wills 6: Family Provisions and Post Death Variations

Question 1

Categories of applicant under Inheritance (Provision for Family and Dependants) Act 1975

Answer 1

1. Spouse/civP
2. Former spouse/civP who hasn’t remarried (UNLESS divorce court bars claim)
3. Child (inc adopted)
4. Someone treated by deceased as a child of the family
5. Someone who immediately before death was being maintained by deceased
   f. Someone who in 2y immediately before death was living in same household as spouse/civP

Question 2

Categories of applicant under Inheritance (Provision for Family and Dependants) Act 1975: meaning of somone being ‘maintained’ by deceased

Answer 2

‘maintained’=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’.
} Food
} Shelter
} Power

Question 3

Categories of applicant under Inheritance (Provision for Family and Dependants) Act 1975: meaning of ‘ immediately before death’

Answer 3

‘immediately before death’= general arrangements existing during deceased’s lifetime, temp breaks in maintenance immediately before death don’t prevent claim
Ask: is there a settled basis/arrangement between

Question 4

Categories of applicant under Inheritance (Provision for Family and Dependants) Act 1975: conditions for ‘ Someone who in 2y immediately before death was living in same household as spouse/civP’

Answer 4

1. Living in same household as one unit (Public and priv acknowledgement of mutual support and protection)
2. Akin to husband/wife/civil P
   -Reasonable person would regard them as husband and wife
   -Relationship openly acknowledged
   -Lack of sex doesn’t preclude
3. For whole 2y immediately before death (temporary separation eg. hospital/care home before death doesn’t matter)

Question 5

Time limit for claim under Inheritance (Provision for Family and Dependants) Act 1975

Answer 5

Within 6mo of grant of representation OR before grant issued

Question 6

Can the court extend the time limit for family provision and what will they consider?

Answer 6

Yes
Will consider:
§ Merits of applicants claim
§ How promptly they sought permission
§ Has estate already been distributed
§ PRs/beneficiaries had notice within time limit of possible claim
§ Applicant has another remedy if refused (eg sue sol in negligence)

Question 7

Grounds for claim for family provision?

Answer 7

Only ground: ‘the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or a combination of his will and that law, is not such as to make reasonable financial provision for the applicant’.

Question 8

What are the standards for judging ‘reasonable financial provision’:

Answer 8

1. Surviving spouse standard
   Spouse can get such financial provision as is reasonable in all circumstances (Consider how much would get on divorce)
2. Ordinary standard (everyone else)
   } financial provision reasonable in all circumstances for their maintenance
   –’maintenance’-payments for daily living at whatever standard is appropriate to them (rent/heating/food)
   } Person able to pay for own living expenses cant get

Question 9

When deciding ‘reasonable financial provision’ what are the common guidelines for every applicant?

Answer 9

(i) financial resources and needs of applicant, other applicants and beneficiaries now and in the foreseeable future (Consider earning capacity, financial obligations, effect on state benefits)

(ii) deceased’s obligations towards applicant or beneficiary (legal and moral)

(iii) size and nature of the estate (easier if estate large)

(iv) physical or mental disability of any applicant or beneficiary;

(v) anything else which may be relevant, such as the conduct of the applicant
-Eg testator leaves written reasons for excluding applicant in will/other doc (court has discretion as to how much weight to attach to reasons)
-Conduct eg applicant kills deceased (can still apply) or prolonged period of estrangement

Question 10

When deciding ‘reasonable financial provision’ what are the special guidelines

Answer 10

Spouse
-Age
-Contribution to family welfare
-Duration of marriage/CivP
-Likley financial settlement if ended in divorce/dissolution
Child (Education/training)
Cohabitant
-Age (can they work)
-Length of cohabitation
-Contribution to family welfare

Question 11

For the Inheritance (Provision for Family and Dependants) Act 1975, what order can the court make

Answer 11

-Court has wide powers to make orders against net estate
-‘Net estate’-inc prop deceased has/could have disposed of by will +prop passing by survivorship

Question 12

How can payments be made under the Inheritance (Provision for Family and Dependants) Act 1975

Answer 12

1. Periodic payments
2. Lump sum
3. Transfer of specific property

Question 13

How can the court deal with avoidance of family provisions if someone tries to give away prop in their lifetime?

Answer 13

□ Someone may give away their property in their lifetime so that on their death, it does not form part of their ‘net estate’
□ BUT court can order gifts made less than 6y before death with intention of defeating claim are inc. in net estate

Question 14

How can PRs protect themselves with regards to family provision?

Answer 14

□ PRS must NOT distribute estate within 6mo from issue of grant or will be personally liable for family provision claim
□ If claim made after 6mo, PRs not liable but applicant may be able to recover property from beneficiaries

Question 15

Why may post death variation may be wanted

Answer 15

-Beneficiary thinks someone’s been unfairly excluded/hasn’t been left enough
-To make an out of court settlement to avoid going to court for family provision claim
-Tax efficiency

Question 16

Types of arrangement for post-death variation

Answer 16

(a) lifetime gift by beneficiary (accepts and gives to someone else)
(b) Post- death disclaimers (Beneficiary rejects and disclaimed assets pass as though they predeceased)
(c) Post- death variations (Beneficiary can direct where benefit goes and on what terms)

Question 17

What CANT be disclaimed?

Answer 17

-Part of a gift
-Once accepted a benefit from the gift

Question 18

Conditions for post death variation of will

Answer 18

Original ben must:
□ Be over 18
□ Have mental capacity
OR court can consent for them provided variation is for their benefit

Question 19

IHT impacts of disclaiming legacy

Answer 19

PET so could be charged IHT twice (on testators death and beneficiaries death if within 7y)

Question 20

What can be done to reduce IHT impacts of a variation/disclaimer?

Answer 20

can be read back into will so its as if testator gave legacy directly to new beneficiary

Question 21

Conditions for disclaimer/variation to be read back into will

Answer 21

1. In writing and signed by the original beneficiary
2. States that s 142 IHTA 1984 is to apply.
3. Within 2y deceased’s death
4. Not made for a consideration in money or money’s worth.

Question 22

What must happen if more IHT is payable as a result of a variation

Answer 22

deceased’s PRs must join in the written variation.

Question 23

What are the CGT considerations of a post death variation?

Answer 23

-A disclaimer or variation within two years of the deceased’s death can be read back to the deceased’s will for CGT purposes so that there is no disposal by the original beneficiary and no CGT charge.
-Conditions similar to IHT