Inheritance Provision for Family and Dependants Act 1975; claims, limitation periods and pre nuptial agreements
The High Court of England and Wales has recently rejected a claim for reasonable financial provision from the estate of Michael Frederick Hendry
The High Court of England and Wales has recently rejected a claim for reasonable financial provision from the estate of Michael Frederick Hendry (the deceased), brought by his estranged wife (the claimant), because the application was made out of time.
The case has not only provided further insight on how the courts will approach the issue of extending limitation periods for claims but has also touched upon the impact of pre nuptial agreements in assessing claims brought by a spouse under the Act.
The claimant had brought a claim for an order under section 2 of the Inheritance (Provision for Family and Dependants) Act 1975 (the Act) for reasonable financial provision from the estate of the deceased. The claimant was married to the deceased at the date of his death but they had separated in June 2017. The deceased’s will made no provision for the claimant.
In this case, the Grant of Representation to the estate of the deceased was obtained on 29 August 2017 and the claim form was issued by the claimant on 27 April 2018.
Under the Act, a spouse is automatically entitled to bring a claim under the Act if they believe that ‘reasonable financial provision’ has not been made for them. The court will consider the strength of the claim based on a number of factors; however the claim must be brought within 6 months from the date that the Grant of Representation is issued in relation to the estate.
Although a court can grant permission for claims made outside of the limitation period under section 4, the Judge in this case confirmed that the claimant had not shown sufficient grounds to satisfy the court that permission should be granted.
In the judgment to this case, following significant points were raised:
- The Act sets out a substantive not a procedural time limit.
- Full weight was given to the fact that the claimant had an arguable case, and that the estate has not been distributed but that notwithstanding, the facts of this case were not sufficient to confirm that the claimant had acted promptly when the circumstances are fully analysed.
- That refusing permission in this case would not leave the claimant without recourse to other remedies (i.e. a potential claim against the claimant’s lawyers for professional negligence having missed the time limit).
Points to note
The court will rarely grant permission to extend the limitation period for a claim under the Act unless there are exceptional circumstances.
It is vital that claimants seek prompt and specialist legal advice when deciding whether to pursue a claim.
If a claimant has recourse to other financial remedies (i.e. a claim for negligence against their own legal advisors), it is unlikely that permission to apply out of time will be granted.
Personal Representatives (PRs) should seek to obtain a Grant of Representation to the estate as soon as it is practicable to do so. Steps should also be taken by PRs to protect themselves against personal liability
It is not possible to stop someone from making a claim if they are minded to do so. A PR can be personally liable to a successful claimant if he or she distributes the estate too early. However, if a PR holds off from distributing the estate for 6 months (or 10 months if already aware of a potential claim) after the grant of representation he or she minimises their liability if a successful claim is made. There is no direct cost to the estate for withholding distribution and this too is a proper step for the PRs to take.
Pre-nuptial Agreements will be considered as part of claims brought under the Act
Throughout the judgment in this case, reference is made to the fact that the claimant and the deceased had signed a pre-nuptial agreement under which the claimant would receive only £10,000 plus the price of a one-way flight back to her native Philippines on their divorce. Although the decision whether or not to grant permission for the claim to proceed did not hinge on this point, the existence and content of the pre-nuptial agreement was considered by the judge in determining whether the claimant would have an arguable claim if permission was granted.
Pre-nuptial agreements are typically associated with celebrities and the super wealthy, but the reality is quite different. They are growing in popularity with entrepreneurs, people with shares in a limited company, or those with a stake in a family business. Also with those getting married for a second time.
Equally, people who have received an inheritance (be it large or small) may feel that this money should be considered separately to matrimonial assets. Similarly, if they have introduced assets into the relationship over and above those of their partner.
It may be the protection of future shareholdings or a future windfall that is the motivating factor, or ensuring that children from a first marriage do not lose out on their inheritance as a result of a divorce.
Weightmans LLP is able to provide comprehensive and specialist legal advice to both claimants and defendant PRs in relation to claims under the act. The Wills, Trusts and Estates (WTE) team can advise clients looking to create wills on how to minimise any potential claims against their estate on death and our Family team can assist with advice on pre-nuptial and post-nuptial agreements. For further information in relation to any of the issues raised in this article, please contact Sally Cook, Solicitor or your usual member of the WTE team.