Re Estate Of Ramus: IPFDA Claim

The Inheritance (Provisions for Family and Dependants) Act 1975 (Inheritance Act) allows classes of people to bring a claim against an estate for financial provision if they have not been adequately provided for in a Will.

The people who may bring such a claim are:

The amount of financial provision that the claimant may seek depends on who they are, and a number of other factors including their personal financial resources, whether they have greater needs because of disabilities, the comparative needs of other beneficiaries, and the size of the estate overall.

The deceased’s surviving spouse or civil partner, for example, can bring a claim for a financial provision that would be reasonable in the circumstances, regardless of whether that provision was required for their maintenance, and more often than not the Court will look at how they might have fared had the parties divorced. A claim brought by any other person however can do whatever would be “reasonable in the circumstances” for their maintenance.

Ramus v Holt & Ors (Re Estate of Christopher Stewart Ramus) [2022]

Case background

In Re Estate of Ramus a claim was brought under the Act by the deceased’s wife, Mrs Ramus. The deceased in his Will left his residuary estate in a discretionary trust for Mrs Ramus and other discretionary beneficiaries, giving the trustees the power to decide how much Mrs Ramus would benefit and when. The deceased had made letters of wishes as to the use of the trust, but letters of wishes are not binding on trustees. In the letter, the deceased said that the trustees should seek to help his wife maintain her current lifestyle, and grant her a life interest in the marital home, but in the event that “no income be required” by her, or if she remarried, the trustees should consider making no further payments to her. That letter of wishes was prepared as a result of the deceased’s relationship with Mrs Ramus having broken down shortly before his death.

Mrs Ramus brought the claim because she realised she was at risk from the trustees exercising their discretion not to pay her anything more. Accordingly, Mrs Ramus felt the deceased’s Will failed to make reasonable financial provisions for her.

Mrs Ramus own financial position was that she held over £1,500,000 in cash and investments, received an income of approximately £1,700 per month but had a monthly expenditure above £5,000. Mrs Ramus’s income was therefore insufficient to meet her monthly expenditure and Mrs Ramus was reliant on her available capital.

In exercising their powers under the Act, the Court had to consider:

Previous case law suggests that the formation of a discretionary trust is “sufficient” to amount to a reasonable financial provision for a beneficiary. However, each case turns on its facts. In considering this case the Court applied the divorce cross-check and it was determined that if Mrs Ramus and the deceased had divorced at the time of death Mrs Ramus would have received 50% of the matrimonial assets.

The Court’s decision

Mrs Ramus submitted she would also have received a monthly payment from the deceased to cover her expenditure but this was not accepted on the basis that Mrs Ramus’s own assets were greater than those of the deceased. The Court, therefore, concluded that the Will of the deceased left sufficient financial provision for Mrs Ramus, and the trustees should be able to exercise their discretion on the basis Mrs Ramus had substantial assets of her own. It was also noted that Mrs Ramus’s request for the trustees to be replaced was not relevant in the context of a claim under the Act as the identity of the trustees did not have any bearing on whether the Will created reasonable financial provision.

Comment

This case demonstrates that a discretionary trust can be deemed to offer reasonable financial provision for a surviving spouse, even though the trustees can decide against making any payment to the applicant. Perhaps if Mrs Ramus had not had much capital, the Court would have made a very different order.