Financial Claims Upon Death

English and Welsh law recognises the concept of freedom of disposition. In broad terms, this means a person is free, on their death, to leave their assets to whomever they choose. Contrast this with, for example, the French approach to inheritance. There, people are required by law to leave a minimum proportion of their estate to their next-of-kin.

However, freedom of disposition is not absolute in this country. Our law recognises that people have certain legal and moral obligations to provide financially for others in the event of their death. If they do not do so, or do not do so adequately, then there are claims that can be made to secure proper financial provision from the deceased’s estate.

The legal framework

The Act of Parliament that deals with claims of this type is the Inheritance (Provision for Family and Dependants) Act 1975.

This Act describes who may make a claim against the estate of a deceased person.

Claims under the Act may be made in respect of a deceased who died leaving a Will, one who died intestate, or a person whose assets passed to a surviving joint tenant.

Whichever of these is applicable, the qualifying test is that the deceased failed to make reasonable financial provision for somebody he or she had an obligation to maintain.

An application under the Act can only be made in relation to a person who was domiciled in England and Wales when they died.

Proceedings under the Act have to be started within the six months following the grant of representation of the deceased’s estate. This grant is the formal authority given by the court to manage the deceased’s estate. If the deceased left a Will appointing somebody to manage the estate, the grant is usually called Probate. Otherwise, the grant is called Letters of Administration. This six month time limit is not absolute, and an application can be made to the court for permission to start proceedings later. However, any delay will need to be explained, and the longer the delay, the less likely the court is to give permission for a late application.

Who may claim?

The following classes of people – claimants – may be able to make a claim under the Act:

  • the deceased’s spouse or civil partner;
  • a former spouse or civil partner of the deceased who has not remarried or entered into another civil partnership;
  • a person who, for the whole of the two year period immediately before the deceased’s death. was living in the same household as the deceased as their spouse or civil partner;
  • a child of the deceased;
  • any person treated as a child of the family by the deceased at the time of their death but who is not a natural child of the deceased, or
  • any other person who, immediately before their death, was being maintained in whole or in part by the deceased.

What might the court order?

The court will look to ensure that any person claiming under the Act receives reasonable financial provision.

This expression is defined in the Act. For most claimants, it means what is reasonable for a person to receive for their maintenance. The deceased’s spouse or civil partner is entitled to an enhanced level of reasonable financial provision, beyond what might be strictly necessary for maintenance alone.

A court may order one or more of the following out of the deceased’s estate as reasonable financial provision:

  • payment of regular sums for living expenses;
  • payment of a lump sum;
  • transfer(s) of property;
  • putting a property into a trust for the claimant’s use;
  • acquisition by the deceased’s estate of a property which is then transferred to the claimant, and / or
  • variation of a pre- or post-nuptial settlement, so long as one of the parties was the deceased.

The Court will take a number of factors into consideration in deciding whether a deceased has made reasonable financial provision for a claimant. These include: the claimant’s financial needs and resources (and those of any other claimant); the financial needs and resources which a beneficiary of the deceased’s estate has or is likely to have; any binding obligations or liabilities of the deceased; the size and nature of the net estate, and relevant health considerations for the claimant. The court has a wide discretion to take into account other factors and considerations it considers relevant in a particular case.

How can we help?

  • Advise whether you might be able to bring a claim.
  • Advise the personal representatives of an estate against whom a claim has been brought or intimated.
  • Assess, by reference to the circumstances of the case, the likely outcome of a claim if pursued.
  • Assess what evidence will assist the Court and support your making or opposing a claim.
  • Conduct litigation for you, from pre-action stages through to trial.
  • Focus negotiation, mediation and / or arbitration to achieve an early settlement, if possible with minimal court involvement, wherever possible.

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