When making your will, you may, for one reason or another, choose to distribute your estate unevenly between your loved ones. However, as a High Court ruling showed, you are under an overriding duty to make reasonable provision for members of your family and anyone else who depends upon you financially.
By his will, a man bequeathed £10,000 to each of his three adult children. He left the remainder of his estate, which was worth about £475,000 in total, to his daughter. His two sons subsequently issued court proceedings under the Inheritance (Provision for Family and Dependants) Act 1975 on the basis that the will did not provide for their reasonable needs. They valued their claims against the estate, in total, at more than £250,000.
Ruling on the matter, the Court noted that the man had evidently decided to leave the lion's share of his estate to his daughter because he regarded his sons as not having behaved well. He was only deterred from cutting his sons out of his will altogether as a result of his solicitor's advice.
As a reminder, the burden of proof in 1975 Act claims is on the applicants to establish that reasonable financial provision has not been made in the will. Evidence from both claimants as well as the factors set out in section 3 of the 1975 Act were considered by Mr Justice Zacaroli.
Rejecting the younger son's claim, the Court noted that he owned his family home and two other properties, with combined equity in the region of £240,000. The younger son also had his own profitable business. His annual income of just over £30,000 was relatively modest but was sufficient to meet his reasonable needs, both now and in the foreseeable future. The gift of £10,000 in the will was therefore sufficient to make reasonable provision for him.
The older son was in a very different position in that he was chronically disabled and suffered from Crohn’s disease, anxiety and spondylitis. He was dependent on others' help for many day-to-day tasks and was in receipt of benefits. He also lived with his long-term friend in her housing association property. The Court considered the evidence put before it and found the older son’s evidence in respect of his finances “sketchy”. There was also evidence from others indicating that he had gambling problems and it was inferred from bank statements that payments were being made by him to fund his gambling habit. The Court found that since the older son had sufficient spare cash to spend on gambling, he had more than enough money to meet his current and modest needs. However, it was accepted that his medical condition was likely to deteriorate in the future, resulting in an increasing need for care. The Court found that it was unreasonable for his particular needs relating to his disabilities not to have been recognised in the will and based on this, the older son was awarded an additional £25,000 from the estate with the provision that the money would be placed in a discretionary trust to cover his care costs. Any sum remaining in the trust fund on his death would revert to his sister.
For advice on complex wills, contact Sam Elsmore s.elsmore@sydneymitchell.co.uk on 08081668860 for advice regarding inheritance disputes contact Mitra Mann m.mann@sydneymitchell.co.uk on 0121 746 3352 / 08081668827 for guidance.
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