Making a financial claim against a deceased person’s estate: Claims under the Inheritance (Provision for Family and Dependents) Act 1975.

In this blog, FLiP considers who can make a claim out of a deceased person’s estate and, in particular, looks at two recent cases in which the courts have made orders for financial provision pursuant to the Inheritance (Provision for Family and Dependents) Act 1975 (the ‘1975 Act’) where the parties had been cohabiting.

Where financial provision has not been made for someone who has a close personal connection to a deceased person, they may be able to make a claim under the Inheritance (Provision for Family and Dependents) Act 1975. In particular, this can come as welcome news to someone who had been cohabiting with the deceased for some time given the limited rights that cohabitants currently enjoy when relationships come to an end.

Claims under the 1975 Act may come about because:

• an individual has either not been provided for under a Will;
• there is no Will and the individual has not inherited under the intestacy rules; or
• the inheritance received is simply not enough to meet their needs.

In the UK, cohabiting couples are the fastest growing family type. Despite this, the family law system fails them in many respects. When the relationship comes to an end for whatever reason, there can often be insufficient financial protection in place unless this has explicitly been provided for – in a Will, for example. The result? Individuals may be left in a precarious financial position despite having been in a loving relationship (akin to marriage) for many years. What remedies are therefore in place when one party to the relationship dies and the deceased has not made reasonable financial provision for their surviving partner?

Who can make a claim?

The following may be able to make a claim against the deceased’s estate:

1. the spouse or civil partner of the deceased;
2. the former spouse or civil partner of the deceased who has not subsequently remarried;
3. any person with whom the deceased was living for at least two years prior to his/her death and with whom the deceased lived as husband/wife or civil partner;
4. a child of the deceased;
5. any person who was treated by the deceased as a child of the family; and
6. any person who immediately before the death of the deceased was being maintained by the deceased.

The 1975 Act provides that in certain circumstances, the court has the power to make an order for ‘reasonable financial provision’ (which can include provision for accommodation) if no such provision out of the estate of the deceased has been made. This will be crucial in cases where, for example, the deceased owned the property in which the parties lived and that property is due to pass to the beneficiaries of the estate, which may not in fact be the person who had been living in the property with the deceased.

Claims by cohabitants

Where a couple had been living together and one party passes away, the surviving cohabitant may be able to make a claim for financial provision under the 1975 Act. The surviving cohabitant must have been living with the deceased for a minimum of two years before the deceased passed away and the couple must have been in a relationship akin to marriage/civil partnership.

Recent examples

Thompson v Raggett [2018] EWHC 688 (Ch) is a case where Mrs Thompson and Mr Hodge had lived together in a relationship akin to marriage for 42 years before Mr Hodge passed away. Mr Hodge made no provision for Mrs Thompson in his Will. The estate included the property in which they had lived. His total estate was worth £1.5 million, all of which was left to tenants and friends. Mrs Thompson subsequently made an application to the court for reasonable provision for her maintenance under the 1975 Act and the court awarded her the following:

• A property worth £225,000 in which it was intended that the parties would have lived.
• £160,000 in respect of future maintenance and care costs for Mrs Thompson.
• £28,845 for Mrs Thompson to renovate the property to suit her needs.

It is noteworthy that instead of awarding Mrs Thompson a ‘life interest’ in the property (whereby the property would revert to the original beneficiaries on her death), it was awarded to her outright. Of key significance in this case was the length of the parties’ relationship, the dependency of Mrs Thompson on Mr Hodge and the court’s desire to avoid Mrs Thompson having to ask anyone for permission should she want to renovate the property or raise capital on it which would have been the case had she only been awarded a life interest in the property.

Lewis v Warner [2017] EWCA Civ 2182 concerned an unmarried couple, Mrs Blackwell and Mr Warner (age 93 at the time of the appeal hearing) who had lived together in a property owned by Mrs Blackwell for 19 years before she passed away. Mrs Blackwell’s estate passed to her daughter who then wished to sell the property in which Mr Warner was still living. Understandably, Mr Warner, because of his health, his age and the fact that he was settled in the home in which he had lived with Mrs Blackwell, did not wish to leave the property. The property held significant ‘non-monetary’ value for him as he had lived in the village all his life and relied heavily upon a neighbour who was a doctor and had offered assistance to him when he needed it. Initially, the court ordered that the property be transferred to Mr Warner for £385,000. Mrs Blackwell’s daughter appealed.

Mr Warner had said that he had not expected Mrs Blackwell to have made a provision for him in her will due to his own independent wealth. Nevertheless, the Court of Appeal found that by failing to provide that Mr Warner could remain in the property, this amounted to a failure to provide ‘reasonable financial provision’ – an interesting interpretation of what constitutes ‘maintenance’ in this context. The Court of Appeal held that the court at first instance was right to make a transfer of the property to Mr Warner for the sum of £385,000.

This case is quite exceptional given the age of Mr Warner and the length of time he had cohabited with Mrs Blackwell. Additionally, this case highlighted that the financial value of the property in this scenario was not nearly as important as the property itself and there was clearly a strong desire on the part of the court not to uproot Mr Warner even though he had the financial means to purchase another home for himself.

Both these cases are set against the backdrop of Ilott v The Blue Cross and Others [2017] UKSC 17. This was a case in which the Supreme Court overturned a ruling of the Court of Appeal in favour of Mrs Ilott’s daughter who had been excluded from her mother’s £500,000 estate in favour of three charities. At first instance, the daughter was awarded £50,000. On appeal, the Court of Appeal held that she was not given reasonable financial provision under the Will and made an award of £143,000 so she could purchase the home which she was renting and £20,000 additional income. The Supreme Court struck out this ruling and reinstated the original judgment of £50,000.