Inheritance Act Claims: What is Reasonable Financial Provision?

Understanding Inheritance Act claims

Challenging a will through using the mechanism of Inheritance Act claims allows claimants to apply to court for reasonable financial provision from a deceased person’s estate, without questioning the validity of the testator’s will.

Section 1 of the Act outlines the list of potential Inheritance Act claimants, i.e dependants. People who can potentially claim under the act are:

• Spouses and civil partners;
• Former spouses or civil partners (so long as they have not entered a new civil partnership or remarried);
• Individuals who lived with the deceased for a period of more than 2 years immediately before the deceased passed away;
• Children of the deceased;
• Any other person who, immediately before the testator passed away, was partly or wholly maintained by the deceased.

Section 2 of the Act sets out the definition of “reasonable financial provision”. Several cases that have tested this definition are set out below. 

Lewis v Warner [2017] EWCA Civ 2182

 In Lewis v Warner, Mr Warner made an Inheritance Act claim against the estate of his late partner of 19 years. In her will, the deceased had left the house where the couple had lived together to her daughter. However reluctant he was to move out of the house due to his various health problems and age of 91, Mr Warner turned down an offer from his late partner’s daughter to sell him the house for £425,000, describing it as an overvaluation.

A Roof Over One’s Head

As he and his partner had been unmarried, Mr Warner’s claim fell under Section 2(b) of the Inheritance Act, which states the definition of reasonable financial provision for all dependants other than spouses and civil partners:

“such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance.”

The court had to ask: what was reasonable in all the circumstances for Mr Warner to receive for his maintenance? The court decided that “a roof over one’s head” qualified as maintenance, even though Mr Warner had been significantly wealthier than his late partner. The court ordered the deceased’s daughter to sell Mr Warner the house at market value.

The judge stated, if Mr Warner had been “younger and less infirm when the deceased died, he would indeed have been required to move out.” The court acknowledged that the wide definition of maintenance to include “a roof over one’s head” was reflective of all of the circumstances of the case i.e Mr Warner’s age and ill health.

Spouses and Civil Partners and Inheritance Act claims

Marriage and civil partnership play an important role in contentious probate law. Section 2 (a) and 2 (aa) of the Act explain that for spouses and civil partners, reasonable financial provision in Inheritance Act claims means:

“such financial provision as it would be reasonable in all the circumstances of the case for a husband or wife [or civil partner] to receive, whether or not that provision is required for his or her maintenance”

It is interesting to note that the question of maintenance would not have been an issue in deciding what constituted “reasonable financial provision”, if Mr Warner and his late partner had been married.

 Roberts & Anor v Fresco [2017] EWHC 283 (Ch)

In Roberts & Anor v Fresco, Mr and Mrs Milbour were married, and both had children from previous relationships. Mrs Milbour passed away in January 2014, when her estate was worth over £16 million, leaving only £150,000 to her husband in her will. Mr Milbour passed away in October of the same year. He did not make an Inheritance Act claim.

While Mrs Milbour’s daughter inherited millions of pounds from her mother, Mr Milbour’s daughter and granddaughter were left only £320,000 from his estate. The court was asked to determine whether an Inheritance Act claim could be made on Mr Milbour’s behalf after he had died. The court decided that it was not possible to make a claim under the Inheritance Act on behalf of a deceased person.

The court found that Mr Milbour’s daughter could make a new Inheritance Act claim on the basis that she was effectively a child of the marriage between her father and Mrs Milbour and could therefore expect reasonable financial provision. As in the case of Lewis v Warner, such a claim would be subject to financial provision necessary for maintenance, as opposed to such provision as would be reasonable for a husband in the circumstances, not necessarily for maintenance. With a £16 million estate, it is likely that this amount would be lower than if she had been allowed to claim on behalf of her father.

Conclusions

Reasonable financial provision for the purposes of Inheritance Act claims is always measured based on all the circumstances of the case. As a result, the precise application of this term is different in every case. Marriage and civil partnership have a significant impact on the definition of reasonable financial provision, because spouses and civil partners can claim beyond what is required for their maintenance.

Should you feel that you should have received more under a will, it’s worth taking advice from a will dispute specialist. Will Claim solicitors can help, with a free claim assessment, and the option of payment through a ‘no win no fee’ agreement.