Provision for Family and Dependants
Provision for Family and Dependants Introduction
Testamentary freedom: testator could do whatever he liked with his property, including leaving his family destitute. The limit to this freedom is based on the idea that some people (e.g. family) should be entitled to property even if the testator has not left property for them. There is no automatic right, but those people may apply to the court for the provision to be made.
Step 1: Establish that C can apply for the order for provision
Inheritance (Provision for Family and Dependants) Act 1975 1 Application for financial provision from deceased’s estate (1)Where after the commencement of this Act a person dies domiciled in England and Wales and is survived by any of the following persons:— . (a)the wife or husband of the deceased; . (b)a former wife or former husband of the deceased who has not remarried; . (ba)any person (not being a person included in paragraph (a) or (b) above) to whom subsection (1A) below applies; (c)a child of the deceased; . (d)any person (not being a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage; . (e)any person (not being a person included in the foregoing paragraphs of this subsection) who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased; . that person may apply to the court for an order under section 2 of this Act on the ground that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant..
Successful application is on the basis that the financial provision is not
reasonable (s.3) (ground of application) the court may award reasonable financial provision (scope of remedy) Objective test! Seldom interference unless T’s will are obviously wrong. But T’s wishes will be irrelevant in principle, not in reality though.
(1A)This subsection applies to a person if the deceased died on or after 1st January 1996 and, during the whole of the period of two years ending
immediately before the date when the deceased died, the person was living— . (a)in the same household as the deceased, and . (b)as the husband or wife of the deceased (2)In this Act “reasonable financial provision”— . (a)in the case of an application made by virtue of subsection (1)(a) above by the husband or wife of the deceased (except where the marriage with the deceased was the subject of a decree of judicial separation and at the date of death the decree was in force and the separation was continuing), means such financial provision as it would be reasonable in all the circumstances of the case for a husband or wife to receive, whether or not that provision is required for his or her maintenance; (b)in the case of any other application made by virtue of subsection (1) above, means such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance . Spouses’ ground of application: no reasonable financial provision for the
surviving spouse (surviving spouse standard) All other people’s ground: no reasonable financial provision for maintenance (maintenance standard)
There must therefore be a lack of reasonable provision in Z’s will. This has been said to be a discretion statute. Illot v Mitson [2012] C (43)’s mother had left the bulk of her estate to three charities, with no provision for C. The majority of C’s family's income was comprised of state benefits. C had been rejected by her mother (Z) at the age of 17 and had unsuccessfully sought reconciliation on a few occasions. C was awarded a lump sum in the proceedings she brought against the charities under the Inheritance (Provision for Family and Dependants) Act 1975. Held: the right question was, whether having considered all the s.3 factors, the resulting lack of provision was unreasonable. In deciding whether the disposition of the deceased's estate made reasonable provision for the applicant, the trial judge was not exercising a discretion, but making a value judgment based on his assessment of the factors in s.3(1).
1) The surviving spouse standard Under s.2(1), the court may order provision for a spouse if the disposition
of the deceased’s estate effected by his will or the law relating to intestacy,
or the combination of his will and that law, is not such as to make reasonable financial provision for the surviving spouse The standard is reasonable provision in all the circumstances, NOT reasonable provision for C’s maintenance The court has discretion to decide whether separated/former spouses can be subject to this standard based on s.14
2) The maintenance standard Maintenance is undefined in the statute Re Coventry [1979] Buckley LJ: it means such financial provision
as would be reasonable in all the circumstances of the case to enable C to maintain herself in a manner suitable to those circumstances Re Dennis [1981] An ablebodied adult son applied for £50,000 from the estate of his rich father so that he could pay capital transfer tax on an inter vivos gift of £90,000 which his father had made to him and which the son dissipated in spendthrift living. C claimed he would be bankrupt if he did not pay the tax. Held:maintenance does NOT include provision for liability for capital transfer tax or payment of debts owed for HMRC tax on receipt of inter vivos gifts.
BrowneWilkinson J: maintenance means ‘payments which, directly or indirectly, enable C in future to discharge the cost of his daily living at whatever standard of living is appropriate to him.’ Here, the payment of the tax would NOT contribute to C’s living expenses. Therefore, the application for payment of the tax was NOT an application for maintenance! Oliver J: a very broad interpretation of ‘maintenance’ seems to come dangerously near to equating it simply with ‘wellbeing’ or ‘benefit’. Obiter: payment of mortgage debt, however, may be maintenance as it relates to daytoday living Commentary: Williams: It is clear that maintenance means expenses of living of an income nature (i.e. income expenses, food and clothing etc.) They may be highly normative depending on the court’s perception of an appropriate standard of living. Graham v Murphy [1997] (modest house) cohabitants over 18 years are entitled to apply. Held: The proper order was not to provide him with a particularly high standard of living but a lump sum of GBP 35,000 to assist with the purchase of a modest house or flatin less expensive area with assistance of a small mortgage. Commentary: The standard of living with one another is not recognised. The modest standard living – decent life – is the
standard. Money given to them enough for purchase of flat mortgagefree. Therefore it is not a lottery win. Re Callaghan [1984] C’s mother died intestate. C applies for an order because he wishes to buy his house without the burden of a mortgage weighing upon him for the remainder of his working years. Held: In my judgment that is a reasonable requirement for his maintenance. Re Jennings [1994] C did not really need the money as they could pay off the mortgage themselves. CA Held: discharging C’s mortgage might be for C’s general benefit or welfare, but NOT reasonably required for C’s maintenance. Paying off a mortgage is NOT daytoday expenditure.One can just rent and have a home. Mortgage is about acquisition of capital asset incumbent by debt! Commentary: this seems to contradict Re Callaghan
Specific classes of C
This is the law under which C is classified into the above categories
1) Z’s spouse/civil partner (s.1(1)(a)) The burden of proof is on C to show that he was Z’s spouse/CP Category includes i) Spouse in lawful polygamous marriage in original
ii)
jurisdiction.All of the spouses of Z are entitled to intestacy and to apply under the statute (Re Sehota) Official Solicitor v Yemoh [2010] the wife of a polygamous relationship is a “wife of the deceased” within the meaning of section 1 of that Act C who entered into a void marriage in good faith
Surviving spouses are subject to the surviving spouse standard Re Besterman [1984] Z was a millionaire academic, and left W (faithful wife) a small annual income, forgetting to make a provision to give W a place to live. Z gave away the house and most assets to Oxford and left W homeless. The University of Oxford acknowledges that Z’s provision was not reasonable. Quantification issue arose. Trial judge considered W’s standard of living. CA Held:W is subject to the surviving spouse standard, NOT the maintenance standard! W received more than Z intended and more than what she would have got under divorce.
Particular guideline S.3(2): additional factors
(2)Without prejudice to the generality of paragraph (g) of subsection (1) above, where an application for an order under section 2 of this Act is made by virtue of section 1(1)(a) or 1(1)(b) of this Act, the court shall, in addition to the matters specifically mentioned in paragraphs (a) to (f) of that subsection, have regard to— . (a)the age of the applicant and the duration of the marriage; . (b)the contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family; . and, in the case of an application by the wife or husband of the deceased, the court shall also, unless at the date of death a decree of judicial separation was in force and the separation was continuing, have regard to the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a degree of divorce. The imaginary divorce guideline Death and divorce are different due to the finality of a clean break(needed for divorce, not death) The imaginary divorce test is only a guideline. It is not conclusive as to what is the reasonable provision in all circumstances. Re Bunning [1984] under matrimonial proceedings the max W could get was £36,000, as opposed to £60,000 under the 1975 Act 2) Z’s former spouse/civil partner (s.1(1)(b)) Former spouse/CP means a person whose marriage/CP with Z was
dissolved/annulled during Z’s life time By a decree of divorce/nullity The maintenance standard of ‘reasonable provision’ is applicable Exspouses may apply if they have not remarried + if there is no ‘clean break’provision on divorce (clean break = no more obligations towards partners)
Particular guideline S.3(2): the additional factors are, again, relevant S.14:the court has power to treat a former spouse as a living spouse (12 month requirement + no application/proceeding under the MCA) 14 Provision as to cases where no financial relief was granted in divorce proceedings etc. (1)Where, within twelve monthsfrom the date on which a decree of divorce or nullity of marriage has been made absolute or a decree of judicial separation has been granted, a party to the marriage dies and— .
Testamentary freedom: testator could do whatever he liked with his property, including leaving his family destitute. The limit to this freedom is based on the idea that some people (e.g. family) should be entitled to property even if the testator has not left property for them. There is no automatic right, but those people may apply to the court for the provision to be made.
Step 1: Establish that C can apply for the order for provision
Inheritance (Provision for Family and Dependants) Act 1975 1 Application for financial provision from deceased’s estate (1)Where after the commencement of this Act a person dies domiciled in England and Wales and is survived by any of the following persons:— . (a)the wife or husband of the deceased; . (b)a former wife or former husband of the deceased who has not remarried; . (ba)any person (not being a person included in paragraph (a) or (b) above) to whom subsection (1A) below applies; (c)a child of the deceased; . (d)any person (not being a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage; . (e)any person (not being a person included in the foregoing paragraphs of this subsection) who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased; . that person may apply to the court for an order under section 2 of this Act on the ground that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant..
Successful application is on the basis that the financial provision is not
reasonable (s.3) (ground of application) the court may award reasonable financial provision (scope of remedy) Objective test! Seldom interference unless T’s will are obviously wrong. But T’s wishes will be irrelevant in principle, not in reality though.
(1A)This subsection applies to a person if the deceased died on or after 1st January 1996 and, during the whole of the period of two years ending
immediately before the date when the deceased died, the person was living— . (a)in the same household as the deceased, and . (b)as the husband or wife of the deceased (2)In this Act “reasonable financial provision”— . (a)in the case of an application made by virtue of subsection (1)(a) above by the husband or wife of the deceased (except where the marriage with the deceased was the subject of a decree of judicial separation and at the date of death the decree was in force and the separation was continuing), means such financial provision as it would be reasonable in all the circumstances of the case for a husband or wife to receive, whether or not that provision is required for his or her maintenance; (b)in the case of any other application made by virtue of subsection (1) above, means such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance . Spouses’ ground of application: no reasonable financial provision for the
surviving spouse (surviving spouse standard) All other people’s ground: no reasonable financial provision for maintenance (maintenance standard)
There must therefore be a lack of reasonable provision in Z’s will. This has been said to be a discretion statute. Illot v Mitson [2012] C (43)’s mother had left the bulk of her estate to three charities, with no provision for C. The majority of C’s family's income was comprised of state benefits. C had been rejected by her mother (Z) at the age of 17 and had unsuccessfully sought reconciliation on a few occasions. C was awarded a lump sum in the proceedings she brought against the charities under the Inheritance (Provision for Family and Dependants) Act 1975. Held: the right question was, whether having considered all the s.3 factors, the resulting lack of provision was unreasonable. In deciding whether the disposition of the deceased's estate made reasonable provision for the applicant, the trial judge was not exercising a discretion, but making a value judgment based on his assessment of the factors in s.3(1).
1) The surviving spouse standard Under s.2(1), the court may order provision for a spouse if the disposition
of the deceased’s estate effected by his will or the law relating to intestacy,
or the combination of his will and that law, is not such as to make reasonable financial provision for the surviving spouse The standard is reasonable provision in all the circumstances, NOT reasonable provision for C’s maintenance The court has discretion to decide whether separated/former spouses can be subject to this standard based on s.14
2) The maintenance standard Maintenance is undefined in the statute Re Coventry [1979] Buckley LJ: it means such financial provision
as would be reasonable in all the circumstances of the case to enable C to maintain herself in a manner suitable to those circumstances Re Dennis [1981] An ablebodied adult son applied for £50,000 from the estate of his rich father so that he could pay capital transfer tax on an inter vivos gift of £90,000 which his father had made to him and which the son dissipated in spendthrift living. C claimed he would be bankrupt if he did not pay the tax. Held:maintenance does NOT include provision for liability for capital transfer tax or payment of debts owed for HMRC tax on receipt of inter vivos gifts.
BrowneWilkinson J: maintenance means ‘payments which, directly or indirectly, enable C in future to discharge the cost of his daily living at whatever standard of living is appropriate to him.’ Here, the payment of the tax would NOT contribute to C’s living expenses. Therefore, the application for payment of the tax was NOT an application for maintenance! Oliver J: a very broad interpretation of ‘maintenance’ seems to come dangerously near to equating it simply with ‘wellbeing’ or ‘benefit’. Obiter: payment of mortgage debt, however, may be maintenance as it relates to daytoday living Commentary: Williams: It is clear that maintenance means expenses of living of an income nature (i.e. income expenses, food and clothing etc.) They may be highly normative depending on the court’s perception of an appropriate standard of living. Graham v Murphy [1997] (modest house) cohabitants over 18 years are entitled to apply. Held: The proper order was not to provide him with a particularly high standard of living but a lump sum of GBP 35,000 to assist with the purchase of a modest house or flatin less expensive area with assistance of a small mortgage. Commentary: The standard of living with one another is not recognised. The modest standard living – decent life – is the
standard. Money given to them enough for purchase of flat mortgagefree. Therefore it is not a lottery win. Re Callaghan [1984] C’s mother died intestate. C applies for an order because he wishes to buy his house without the burden of a mortgage weighing upon him for the remainder of his working years. Held: In my judgment that is a reasonable requirement for his maintenance. Re Jennings [1994] C did not really need the money as they could pay off the mortgage themselves. CA Held: discharging C’s mortgage might be for C’s general benefit or welfare, but NOT reasonably required for C’s maintenance. Paying off a mortgage is NOT daytoday expenditure.One can just rent and have a home. Mortgage is about acquisition of capital asset incumbent by debt! Commentary: this seems to contradict Re Callaghan
Specific classes of C
This is the law under which C is classified into the above categories
1) Z’s spouse/civil partner (s.1(1)(a)) The burden of proof is on C to show that he was Z’s spouse/CP Category includes i) Spouse in lawful polygamous marriage in original
ii)
jurisdiction.All of the spouses of Z are entitled to intestacy and to apply under the statute (Re Sehota) Official Solicitor v Yemoh [2010] the wife of a polygamous relationship is a “wife of the deceased” within the meaning of section 1 of that Act C who entered into a void marriage in good faith
Surviving spouses are subject to the surviving spouse standard Re Besterman [1984] Z was a millionaire academic, and left W (faithful wife) a small annual income, forgetting to make a provision to give W a place to live. Z gave away the house and most assets to Oxford and left W homeless. The University of Oxford acknowledges that Z’s provision was not reasonable. Quantification issue arose. Trial judge considered W’s standard of living. CA Held:W is subject to the surviving spouse standard, NOT the maintenance standard! W received more than Z intended and more than what she would have got under divorce.
Particular guideline S.3(2): additional factors
(2)Without prejudice to the generality of paragraph (g) of subsection (1) above, where an application for an order under section 2 of this Act is made by virtue of section 1(1)(a) or 1(1)(b) of this Act, the court shall, in addition to the matters specifically mentioned in paragraphs (a) to (f) of that subsection, have regard to— . (a)the age of the applicant and the duration of the marriage; . (b)the contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family; . and, in the case of an application by the wife or husband of the deceased, the court shall also, unless at the date of death a decree of judicial separation was in force and the separation was continuing, have regard to the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a degree of divorce. The imaginary divorce guideline Death and divorce are different due to the finality of a clean break(needed for divorce, not death) The imaginary divorce test is only a guideline. It is not conclusive as to what is the reasonable provision in all circumstances. Re Bunning [1984] under matrimonial proceedings the max W could get was £36,000, as opposed to £60,000 under the 1975 Act 2) Z’s former spouse/civil partner (s.1(1)(b)) Former spouse/CP means a person whose marriage/CP with Z was
dissolved/annulled during Z’s life time By a decree of divorce/nullity The maintenance standard of ‘reasonable provision’ is applicable Exspouses may apply if they have not remarried + if there is no ‘clean break’provision on divorce (clean break = no more obligations towards partners)
Particular guideline S.3(2): the additional factors are, again, relevant S.14:the court has power to treat a former spouse as a living spouse (12 month requirement + no application/proceeding under the MCA) 14 Provision as to cases where no financial relief was granted in divorce proceedings etc. (1)Where, within twelve monthsfrom the date on which a decree of divorce or nullity of marriage has been made absolute or a decree of judicial separation has been granted, a party to the marriage dies and— .
