Case Update - Inheritance (Provision for Family and Dependants) Act 1975
The High Court recently handed down its judgment in the case of Kaur v Estate of Karnail Singh & Ors [2023] EWHC 403 (Fam).
In this case, the wife of the Deceased brought a claim against the estate after she had been excluded from the Deceased’s Will. The couple had been married for 66 years, but the Deceased’s Will provided that all of his assets (worth more than £1 million) would be split equally between the couple’s two sons, to keep the assets in the family’s male bloodline.
The Judge awarded the widow half of the Deceased’s estate, as he said it was clear that reasonable provision had not been made for her, despite her having made a full and equal contribution to the marriage, during which the estate assets accrued. The widow’s only income consisted of state benefits of around £12,000.
Inheritance (Provision for Family and Dependants) Act 1975
The claim was brought under the Inheritance Act (Provision for Family and Dependants) Act 1975 (“the 1975 Act”) which allows certain classes of people to bring a claim against a Deceased’s estate where the Will (if there was one) or the rules of intestacy do not make ‘reasonable financial provision’ for them.
Who can bring a claim?
- The Deceased’s spouse or civil partner;
- The former spouse or civil partner of the Deceased (as long as that person has not re-married or entered into another civil partnership);
- The Deceased’s children (including adult children);
- Stepchildren of the Deceased; and
- Any person who was maintained by the Deceased immediately prior to their death.
What will the Court consider?
If the person bringing the claim was the spouse of the Deceased, the starting point will be what is reasonable for the claimant to receive (whether or not it is for their maintenance).
In all other cases, the Court will consider what is reasonable for the claimant to receive for their maintenance.
There are factors listed in the 1975 Act which the Court must take into account, which include the size of the estate; the financial resources and needs of the Claimant, any other potential applicant, and the beneficiaries; any physical or mental disability of the Claimant, any applicant or any beneficiary; and any other factor which the Court deems relevant.
What award can the Court make?
The Court has discretion as to the award it can make, and can make a wide range of orders, which include:
- A lump sum or one-off payment
- An order that the Claimant be paid an income from the estate
- Deferred payments
- An amount settled on trust
- A variation of an ante-nuptial or post-nuptial settlement (and equivalent settlements relating to civil partnerships)
- An option to purchase an asset of the estate
Who pays the costs of the claim?
The general rule in litigation is that the loser pays the winner’s costs (subject to the effect of any offers which have been made throughout the proceedings; and any deductions the Court may make based on conduct and other factors).
Therefore, if a Claimant is successful in making a claim against the estate (and where the claim is defended by the beneficiaries of the estate), the beneficiaries should bear the Claimant’s costs.
The Executors of the estate will be named as a party to the proceedings and must provide specified information about the value of the estate. If the Executors remain neutral and do not defend the claim, their costs will be paid by the estate.