When claimants are considering a claim for reasonable financial provision under the Inheritance (Provision for Family and Dependents) Act 1975 (“the Act”) one of the main factors to take into account is the value of the deceased’s estate.
If the estate has little to no value, there would be no point bringing a claim, as there are no assets to provide that provision to claimants.
In the majority of cases, the deceased’s property is the most valuable asset in their estate and once sold can provide a pot of money which the claimant’s financial provision can come from.
Jointly owned property
However, problems can arise for claimants where the deceased’s property is owned as joint tenants rather than tenants in common, if they owned the property with another person.
When two or more people own property, they own the property as joint tenants or tenants in common, which have the following consequences on the death of one of the owners:
Joint tenants – if the property is held as joint tenants, the whole beneficial interest in the property automatically passes to the other owner(s) through what is called ‘the right of survivorship’ and is therefore not included in the deceased’s estate at all.
Tenants in common – where two or more people own a property as tenants in common, they can hold the beneficial interest in the property in severable shares. This is not always 50/50 – the owners can decide what percentage share they each hold which is usually recorded in a declaration of trust. In this situation, the deceased’s share of the property would fall into their estate on their death.
Claimants may think it is the end to their potential claim under the Act where the property is jointly owned but that is not necessarily the case.
Under s9 of the Act, a claimant can ask the Court, as part of their claim for financial provision, for the deceased’s severable share of that property to be treated as part of the deceased’s estate.
The Court will only make an order under s9 if it appears to be “just in all the circumstances of the case”. This means that the Court will decide on a case-by-case basis when taking into account all the evidence before them.
If the Court does decide to bring in the deceased’s severable share of the property, they will also decide on the percentage share to be available for the purposes of the claim.
When considering a s9 application as part of a claim under the Act, another issue to consider is whether the other owner is still living in the property and how much longer they will be living there for. The Court will consider what can be done in such circumstances, such as making an order that the property be sold or an agreement could be reached where the co-owner purchases the deceased’s severable share and the funds fall into the estate.
There is a wide range of orders that the Court can make when determining a claim under the 1975 Act. There is a 6-month time limit from the date of the grant of probate being obtained to bring a claim under the Act. Therefore, claimants should seek advice at the earliest opportunity following the deceased’s death so that they can find out what options are available to them.