A forfeiture/non-contest clause is a clause in a will that causes the beneficiary’s interest to be taken away if he/she challenges the provisions of the will, typically under the Inheritance (Provision for Family and Dependants) Act 1975 (1975 Act). Our recent blog discusses what is a 1975 Act claim.
It is a useful tool in safeguarding one’s freedom of testamentary disposition but it is not possible to oust the court’s jurisdiction. Therefore, a clause that a beneficiary cannot make a 1975 Act claim would not be valid.
The gift to the beneficiary under the will generally needs to be substantial in the circumstances of the case such that the beneficiary does not wish to risk losing it in order to make a 1975 Act claim, which entails a significant amount of risks due to the court’s wide discretion. Where the testator does not wish to make such a gift, the clause will likely be less effective and may even alert the beneficiary to the prospect of making a claim.
Sim v Pimlott and Others [2023] EWHC 2296 (Ch)
Background
The deceased Dr Sim had been married to his wife Valerie Sim for almost 20 years at the time of his passing in 2018. The net value of his estate was around £1.2 million. In Dr Sim’s will, there was a forfeiture clause stating that Valerie would receive £250,000 if she executed a Deed of Release of all rights that she may have to claim under the 1975 Act. There was also an additional £125,000 if she released her interest in their jointly owned property in Dubai. Valerie was also left with income from the residuary estate, which was to be held on trust during her lifetime.
Valerie brought a claim under the 1975 Act on the basis that Dr Sim did not make reasonable financial provision for her and forfeited her entitlements.
Decision
The Court held that Dr Sim was entitled to have such a forfeiture clause in his will and it was effective:-
‘… it would be wrong in principle for a claimant to pursue a 1975 Act claim in the knowledge that in doing so, they will forego a certain benefit; and then to say that, because they have foregone that benefit, the will fails to make reasonable financial provision for that beneficiary.’
If Valerie had complied with this clause, the amount she would have received, i.e. £375,000, would have been sufficient under the 1975 Act. Given that she lost the monetary sums and was left with only the life interest to income from the residuary estate, the court made an order varying the trust to require the trustees to set aside a capital sum of up to £400,000 for Valerie to purchase a property but on the basis that she paid all the expenses in the expenses in relation to the property and other outgoings for the rest of her life.
How can we help?
Ronny Tang is an Associate in our expert Dispute Resolution team, specialising in defamation claims, contentious probate and inheritance claims, Trusts of Land and Appointment of Trustees Act 1996 claims, Equality Act 2010 claims and Protection From Harassment 1997 claims.
If you need any advice concerning the subject discussed in this article, please do not hesitate to contact Ronny or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
Contact us