Earlier this month the High Court of England and Wales rejected a widow’s claim under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”) that her late husband’s will failed to make reasonable provision for her on account of her relationship with one of the trustees of a trust under which the will granted her a life interest, writes Rachel Waller, a Partner and head of our Contentious Probate and Trusts team.
Her claim was based on the grounds that the will left her only a life interest that could be terminated at any time at the discretion of the trustees, who happened to include her daughter with whom she had a tense relationship. The judge summed up the case as being based on “a wholly novel argument that reasonable financial provision had not been made, not because of the terms of the will itself, but because a claimant objects to the identity of a trustee or trustees based on a personality clash with one of them.
In June 2020 the testator, Christopher Ramus, died (by suicide) while he and his wife Elizabeth Ramus were preparing to divorce after nearly 50 years of marriage. Part of Elizabeth’s reason for the divorce was an argument between her and her daughter, Claire Holt, with whom she had had a difficult relationship in recent years.
The deceased’s last will was made in 2014, although in 2019 he had made a codicil altering the identities of the executors and trustees. The terms of the will gave the bulk of the estate to a trust under which Elizabeth had a life interest, and the trustees of the deceased’s estate had the power to apply capital for Elizabeth’s benefit. However, the trustees were also given power to terminate the life interest. Furthermore, the will attached a letter of wishes indicating that Elizabeth should receive no capital from the fund but should continue to receive income, but if the trustees could stop Elizabeth receiving income if they decided she did not need it or if she remarried or cohabited with another.
The issue for Elizabeth was that her daughter Claire was named as one of the trustees, and Elizabeth was very concerned that, given their strained relationship, the trustees might utilise the absolute power granted to them to terminate the payment of income to her. Furthermore, the trust fund was to be held on flexible discretionary trusts for the deceased’s children (including Claire) and grandchildren, subject to the life interest, arguably meaning that Claire would be influenced by the potential benefit to her and other family members. Elizabeth’s benefit under the discretionary trust could be excluded at the discretion of the trustees.
As the trustees could stop payment of the income to her at any time and could refuse to advance any capital, Elizabeth did not believe that the will as drafted made reasonable financial provision for her. She was also concerned about Claire’s appropriateness as trustee because Claire had removed some of the deceased’s personal chattels after his death, against the terms of the will. Elizabeth suggested that, to ensure reasonable provision to her, the trustees should be replaced by professional trustees.
The judge ultimately decided that: “Reasonable financial provision from the estate of the deceased does not become unreasonable financial provision because of the identity of the trustees”. It was his view that Claire would not have the sole power to terminate the life interest as the trustees would have to unanimously agreement to exercise that power. Furthermore, the judge was satisfied that he had no jurisdiction under the 1975 Act to remove the trustees and also considered that such a power would undermine other laws concerning the removal of trustees. He found that the “clash” between Elizabeth and Claire “would not of itself justify the removal of an executor or trustee under a removal application and it is difficult to see how it could support a successful claim that the will has failed to make reasonable financial provision.”
The High Court dismissed Elizabeth’s claim on the basis that she had not shown that the terms of the deceased’s will failed to make reasonable financial provision for her (Ramus v Holt & Ors 2022 EWHC 2309 Ch).
Contact our Contentious Probate and Trusts Team
Rachel Waller is a Partner and head of Bishop and Sewell’s Contentious Probate and Trusts team. Should you require any further advice or assistance, please contact her quoting reference CB352 on 020 7091 2706 or email: firstname.lastname@example.org
The above is accurate as at 26 September 2022. The information above may be subject to change during these ever-changing times.
The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.