In England and Wales we have the freedom to make a Will leaving our estate to anyone we choose, but this is tempered to some extent by statute.
The Inheritance (Provision for Family and Dependents) Act 1975 (IPDA) gives some people the ability to claim against an estate if “reasonable financial provision” has not been made for them by the Will, or under the intestacy rules if there is no Will. People who can claim include close relatives, partners who have lived with the deceased person for two years as “husband and wife” before their death and others who were maintained financially by the deceased immediately before their death.
If the court considers that reasonable financial provision has not been made then an order can be made remedying the lack of provision. In most cases such provision is made by the applicant receiving a lump sum or property or an income from the deceased’s estate. A recent High Court case, however, involved a more unusual order for a claimant who was not in need of financial help, but who did wish to retain his home.
Mr Warner’s claim
Mr Stanley Warner had lived with Mrs Audrey Blackwell in a house called “Green Avon” for nearly twenty years. Green Avon was owned by Mrs Blackwell but the couple had never discussed what would happen to the house, the only real asset of her estate, on Mrs Blackwell’s death. Mr Warner was aged over ninety at the time of his partner’s death, he had lived in the village in which Green Avon was situated all his life and had a good support system in place involving his neighbour who was a doctor.
Mrs Blackwell left her estate to her only daughter who offered to sell Green Avon to Mr Warner at what he regarded as an inflated price. When Mrs Blackwell’s daughter started court proceedings to gain possession of Green Avon Mr Warner responded by making a claim under IPDA.
The first court to consider the case decided that Mr Warner should be given the right to purchase the house from the estate for £385,000. An appeal was launched, two of the grounds of which were that the judge had failed to apply the law correctly and had exceeded his powers in making the order giving Mr Warner the right to buy “Green Avon”.
The High Court’s decision
The High Court took the view that “maintenance” could extend further than providing a lump sum or income and could cover “forms of assistance with the requirements of daily life”. Although Mr Warner was “not short of money” the High Court felt that Mrs Blackwell’s Will had indeed failed to make reasonable financial provision for her partner and that the judge was entitled to order the sale of the house to Mr Warner in order to make good that lack of financial provision.
It should be borne in mind when making a Will that certain people have moral claims upon the estate, and that if those claims are not met it may lead to a financial claim under IPDA if the disappointed beneficiary falls within the categories laid down by the Act. In assessing any claim the Court will consider the financial resources of the applicant and the beneficiaries of the estate, but these are only two of a number of factors to be considered by the Court.
This case illustrates that the applicant does not have to be financially needy to be successful and that the courts might be creative in the way that they provide for the applicant.
For further information please contact our Private Client team.