In relation to applications by the surviving husband or wife of the deceased under the Inheritance (Provision for Family and Dependants) Act 1975, a spouse is entitled to claim reasonable financial provision.
What is reasonable financial provision?
Under Section 1 (2) (a) of the Inheritance Act, ‘reasonable financial provision’ is defined as:
“Such financial provision as it would be reasonable in all circumstances the case for a husband or a wife to receive, whether or not that provision is required for his or her maintenance”.
Section 3(1) requires the Court, in adapting both stages of its analysis, to have regard to a list of the following seven matters:
- The financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;
- Financial resources and financial needs which any other applicant for an order under section of this Act has or is likely to have in the foreseeable future;
- The financial resources and needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;
- Any obligation and responsibilities which the deceased had towards any applicant for an order under the said section to or towards any beneficiary of the estate of the deceased;
- The size and nature of the net estate of the deceased;
- Any physical or mental disability of any applicant for an order under the said section 2 or any beneficiary of the estate of the deceased;
- Any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the Court may consider relevant.
In addition, in relation to an application by a surviving spouse, section 3(2) requires the Court to also consider:
- The age of the applicant and duration of the marriage;
- The contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family.
The Court is also to consider the provision which the applicant might reasonably have expected to receive if on the day the deceased died the marriage had, instead of being terminated by death, been determined by divorce. This has been referred to as ‘the divorce cross-check’.
Wooldridge v Wooldridge [2016]
This case marked what is believed to be the first case of its kind to dismiss a widow’s claim for reasonable financial provision from the estate of her late husband under the Inheritance Act.
The deceased, Ian Wooldridge, was a successful businessman who had made his money in the construction industry. He died in 2010 when he was involved in a helicopter crash in Northern Ireland.
Mr Wooldridge had made a homemade Will in which he left the matrimonial home worth £4.25 million to his wife Thandi, along with £1.6 million worth of life assurance policies.
The remainder of Mr Wooldridge’s estate comprised his business interests which he left to his two children, Charlie and Rhett.
In addition to the legacies left to them under Mr Wooldridge’s Will, Mrs Wooldridge, Charlie and Rhett received £1.985 million, £315,000 and £200,000 respectively in compensation for the crash.
Mrs Wooldridge made a claim for an additional £372,000 per annum from the estate to fund the lifestyle to which she had become accustomed. Much was made in the press of the items that she wished to purchase, but ultimately Judge Karen Walden-Smith dismissed Mrs Wooldridge’s claim.
The reasoning behind the Judge’s decision was that Mrs Wooldridge had already received reasonable provision from the estate and that any further provision would likely impact upon the profitability of the business and therefore affect Charlie and Rhett.
It was held that Mrs Wooldridge had more than sufficient assets for her maintenance and whilst not binding, it is a timely reminder of the approach the Courts will take and that each case will be decided on its merits irrespective of section 3 of the Inheritance Act.
How Nelsons can help
Kevin Modiri is a Partner in our Dispute Resolution team, specialising in inheritance dispute claims.
If you have any questions in relation to the subjects discussed in this article, please contact Kevin or another member of our expert team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.