Laura Abbott, Principal Associate in the Disputed Wills and Trusts team at Shoosmiths, explains why claimants using the Inheritance (Provision for Family and Dependants) Act 1975 should consider sections 9-11 of the Act.

What is the Inheritance (Provision for Family and Dependants) Act 1975?

The Inheritance (Provision for Family and Dependants) Act 1975 (‘the Act’) allows certain people (including spouses, cohabitees, children, and persons maintained by the deceased) to claim increased financial provision from a deceased person’s estate where the will or the operation of the statutory rules which apply on intestacy fail to make reasonable provision for them.

The claim is for provision from the net estate, defined in the Act as “all property of which the deceased had power to dispose by his will… less the amount of his funeral, testamentary and administration expenses, debts and liabilities”.

But what happens if the deceased had limited financial resources? And is it possible to defeat a claim under the Act by reducing the value of an estate during lifetime? Afterall, there is little to be gained in proceeding with a claim, even where worthy, if the net estate is of limited value.

However, there may be a dispute about the extent of the estate and potential claimants should consider sections 9-11 of the Act.

Section 9

Section 9 of the Act allows the court to treat the deceased’s severable share of a beneficial joint tenancy as part of the net estate.

Land or property can be owned by two (or more) parties as joint tenants or tenants in common:

• Tenancy in common means that each party has their own distinct share of a property, and their share passes to their estate on death.
• Joint tenants own the whole of the property together. On the death of one joint tenant, surviving joint tenant(s) continue to own the whole. This is called survivorship.

Under section 9, a notional share in a property held on joint tenancy may be attributed to a deceased joint tenant and treated as part of their net estate for the purpose of a claim under the Act “to such extent as appears to the court to be just in all the circumstances of the case”. This is useful because land or property often forms a significant part of the estate in terms of financial value.

Section 10

Section 10 of the Act provides that recipients of gifts made in the six years prior to the donor’s death may have to return the assets to the deceased donor’s estate if the court is satisfied that the gift was made with the intention to defeat a claim under the Act.

For example, in the case of Ruanne Dellal v Guy Dellal & Ors [2015] EWCH 907, Mrs Dellal was the widow of Mr Dellal and she received £15.4 million from his estate which was thought to have been worth £400 million. Mrs Dellal therefore claimed under the Act for reasonable financial provision as she believed Mr Dellal had given assets away during his lifetime. She sought to use section 10 to claw them back. The defendants (the deceased’s children and sister) applied to have her application struck out, which was dismissed. Proceedings were then adjourned pending disclosure. It is thought that the case has since been resolved out of court.

Where a claimant believes the net estate’s probate value does not reflect the deceased’s true net worth, then it is worth considering a section 10 application.

Section 11

Finally, section 11 of the Act provides that if the deceased made a contract to leave property by will with the intention of defeating a claim under the Act, then that contract can be set aside.

This section is rarely used, but the recent case of Sismey v Salandron [2021] 10 WLUK 372 saw a section 11 application litigated to trial for the first time. The deceased had divorced his third wife in 2017 and as part of the divorce settlement he covenanted to leave his home by his will to his son from that marriage. His then girlfriend (who lived with him at his home) was a party to the settlement. They then married so that she would benefit from his pension. Their marriage revoked his will making her, as his surviving spouse, the sole beneficiary of his estate on intestacy. His son brought a claim to enforce the agreement on divorce, and his surviving spouse counterclaimed under section 11 for the deceased’s home to be included in the estate and so available to meet her claim under the Act for reasonable financial provision.

The judge rejected the surviving spouse’s application and upheld the deed of covenant. The judge found that this was part of a negotiated settlement with his third wife on their divorce for which full consideration was given as the third wife did not pursue a claim to his pension. 

Summary

The Inheritance (Provision for Family and Dependants) Act 1975 deliberately makes it difficult for people to avoid its operation. Where an estate appears to be of insufficient value to justify a claim, practitioners ought to make full enquiries in case these provisions can be used to save a potential claim.

About the author

Laura Abbott is a Principal Associate in the in the Disputed Wills and Trusts team at Shoosmiths and is a member of the Society of Trust and Estate Practitioners (STEP).

See also

What you need to know about the right of survivorship

The duties of an executor: what to do when someone dies

What are your legal rights in Scotland for inheritance?

Find out more

Inheritance (Provision for Family and Dependants) Act 1975 (Legislation)

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Publication date: 18 January 2022

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.