CHAPTER ONE – INTRODUCTION
The Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”) is, together with the Matrimonial Causes Act 1973 (“MCA 1973”) a fundamental statutory provision within the realm of what is now termed “private client” law. For fifty years, the 1975 Act has allowed the courts the discretion, in respect of certain categories of person, to re-write the testamentary provisions (or the application of the Intestacy Rules to the Estate) of a deceased testator, to make reasonable financial provision for an applicant. This statutory abrogation of testamentary freedom is, perhaps surprisingly, a relatively recent development in English law. However, within fairly tightly drawn Parliamentary and judicial bounds, it is a law which can operate to prevent egregious injustice, at least from the perspective of a claimant. For a defendant, it can mean that a legacy, particularly where it is to a deserving cause such as a charity, may be reduced or removed all together, and can often mean the incurring of significant costs, which even if the defendant is successful, cannot be recovered from an impecunious claimant. For a defendant therefore, the existence of the right to bring such a claim can appear to be a serious injustice to them, in circumstances in particular where a testator has made a free and fully informed choice not to leave their Estate to relatives.
Claims under the 1975 Act appear to be significantly on the rise. Caution should be exercised when considering statistical analysis that purports to be based upon the number of claims issued in the High Court, and a comparison year on year. This does not give even a tip of the iceberg view of the sheer number of 1975 Act claims that are intimated, or which settle, whether after pre-action correspondence or by way of mediation, pre-issue. Certainly the view of practitioners in this field is that there are a very large number of cases, a volume of work that continues to grow, and, whilst relatively few of these reach trial (primarily because of a combination of the high costs of intensive litigation of this sort and an impetus, from legal representatives and the court system, towards ADR) claims under the 1975 Act are here to stay. The significant increase in housing wealth together with an increase in cohabitation, divorce and re-marriage, and children, and step-children, from multiple relationships, makes a challenge to a will more likely to be financially rewarding. The morbid obsession of the tabloid press with will challenges and fights amongst families over inheritance only serves to publicise the ability to bring a claim and it is relatively easy to find basic information regarding eligibility to bring a claim from a cursory search online.
Freedom of testation means, in its most basic sense, the right of the individual to dispose on death of their property in such manner as they see fit. It is the individual, rather than the State, that exercises autonomy over their assets. This contrasts with the approach of civil jurisdictions and a number of religion-influenced legal regimes, which mandate familial inheritance, whether on the basis of male primogeniture or otherwise. Freedom of testation does however require a default position on intestacy (presently found in section 46 of the Administration of Estates Act 1925 – the so-called Intestacy Rules) – i.e. a State-determined default, from which a testator by leaving a will is able to opt out.
The legal history of testamentary freedom is fascinating, but cannot be done justice in a Practical Guide such as this. Early Roman law promoted the making of a will, as to do so was more likely to provide for family than the application of the ius civile (civil law, or the law between private citizens), and that freedom to leave possessions at will was considered more important than the risk of disinheritance. This subsequently changed following amendments to the scheme of intestate succession meaning that family would benefit, and the pendulum swung away from freedom and towards strict limitation on testamentary freedom, which then fed into the civil law jurisdictions such as in continental Europe.
English law then developed as a result of the feudal system, whereby there was a benefit to the feudal lord of land passing under intestacy laws and thus the chance of giving rise to an escheat (meaning that the lord would take the benefit of the land). The Statute of Uses 1536 abolished the powers of landowners to devise land, though the Statute of Wills 1540 restored much of this power. The law relating to intestate succession to real property remained the same until 1925. In the meantime, the law relating to personal property – chattels – developed differently. Specific chattels could be left by legitim, often with substantial gifts to the church, and with forfeiture to the feudal lord on intestacy (and later, to the church, subsequently with tripartite division by which the family received two thirds of the Estate).
The Wills Act 1837 made clear provision for testamentary freedom, and the Administration of Estates Act 1925 dealt with the codification of the intestacy rules. The latter established for the first time rules that applied equally to real and personal property, and between the gender of the recipient. However there was no in-between position whereby if testamentary provision had been made in a way that excluded natural beneficiaries, they could be provided for.
On 16 May 1928 Viscount Astor moved a motion in the Upper House for an Inquiry as to whether a change was necessary in the laws governing testamentary provision or wives, husbands and children, based upon the experience of Scotland, Australia, “and the other portions of the Empire”. He identified two sets of hardships:
There is, first of all, the case of the surviving spouse who may find himself or herself badly treated, and there is, secondly, the case where the aggrieved persons may be either children or other dependants of the deceased.
He gave a number of examples of hardships:
Let me, then, give you the first and the obvious set of cases which arise. Take the case in which a man marries a woman and then becomes infatuated with another woman, cuts off his lawful wife, leaves her penniless and leaves his property to the other woman. I have a considerable number of such cases. I shall not quote them all but merely give your Lordships one or two specimens. A man, for instance, with business connections in two towns—one of the businesses being managed by his wife—leaves his wife penniless by his will when he dies, and leaves the whole of his property to a woman and her children in the town where he had his other business premises. Another case is that of a man with one little girl who died and left all his property to his mistress. Or take a case which arose not very long ago in London and which had to be dealt with by one of the London boards of guardians. A man, the manager of a small business, left his wife and went to live with another woman. During his lifetime he was compelled by the guardians to make an allowance to his wife, but on his death the law made it possible for him to leave all his money to the other woman and his wife had to be supported out of the rates. During his lifetime he had been compelled to support her, but this maintenance was stopped on his death.
It is not only in cases of people of moderate circumstances that this hardship arises. I have another case of a wealthy man, who left £1,500,000 to his illegitimate children and their mother and only £30,000 to his legitimate children and his lawful wife. It is not only the wife who suffers in these cases. Usually the children appear to side with their mother because of their sense of injustice at the way in which their mother has been treated, and in consequence of that they also suffer injustice under the will. One last case which I will give is that of an Army officer serving abroad. His wife lived in Wales. He died soon after landing on his return to this country. He left £50 to his wife and to each of his children and the remainder of his property to another woman in Egypt, where he had been serving, and to her child. That then is one type of case that has been brought to my notice.
Another is when there is a quarrel between husband and wife or between parent and children, the result of the quarrel being that the owner of the property cuts off his or her spouse, perhaps dying before the quarrel has been put right. There, again, very frequently the children suffer because they side with one of the parents, usually the mother. There is yet another type of case of which I will give two illustrations. I have the case of a man who during his lifetime was obliged to contribute to the maintenance of his wife, who was of unsound mind. At his death it was found that he had left the whole of his property to others, and that the maintenance ceased and the wife had to be supported by the guardians. Another peculiar case came to my notice of a man and woman who lived perfectly happily; at the outset the man was a business man in a small way of business, and he made a will leaving 35 s. a week to his wife and the residue to some charity. He forgot to alter his will, and it was found when he died that he was a man of considerable wealth—he left £500,000. No subsequent will had been made, and his wife was left with 35 s. a week, the whole of the residue of the property went to charity and there was no way of putting the matter right. Obviously it was not the intention of the testator that his wife should be left in those circumstances.
Viscount Astor noted that in New Zealand, the Family Protection Act 1895 gave the court discretion to provide for a wife, husband or children if no adequate provision for maintenance and support was given by will. Australian States had similar provisions.
However a number of eminent learned Lords quickly pushed back on the motion. Viscount Haldane was highly sceptical of the utility of the courts in having a discretion:
The truth is there are only two ways in this matter: either you leave people to make their wills and trust to their sense of justice, as you do in an infinite number of other matters, or you say it is better that some State authority should make their wills for them. Now, I am not averse from the intervention of the State in many cases, but when the State intervenes in matters of wills I have seen too much of what goes on in the Courts to think that the Judges are able to do it wisely. We never know the circumstances. We see only the abstract things that are set out in the document. It is almost impossible to tell what situation a testator has to contemplate and what are the relative positions of the beneficiaries who take under his will. Therefore I am very much averse from putting that duty upon the Judges. If there is to be a tribunal set up, I would much rather set it up out of the Bench of Bishops, who, I am sure, could do it better and more humanely. Anyhow, I do not want to see the law mixed up with it because I am sure the law will not acquit itself very creditably in carrying out the task.
Lord Buckmaster agreed with Lord Haldane, and was of the view that the remedy was not through the courts, but rather that there should be a definite fraction of the estate “to which the woman and the children should be entitled”, and heartily hoped that the court not be given such power.
Viscount Hailsham, the Lord Chancellor, also spoke against the Motion, for similar reasons, and indicated that the Government would resist the suggested Inquiry. Viscount Astor duly withdrew his motion.
Some modern-day defendants might agree with the thrust of these views, and in particular of the way in which the law has acquitted itself.
In 1931, Miss Rathbone introduced a bill in the Lower House, in which a surviving spouse and children received a defined portion. The Bill received a second reading but a Joint Select Committee reported against it. However the Select Committee instead proposed something similar to that put forward by Viscount Astor, allowing applications to be made to the court. A Bill was duly introduced into the Commons by Sir Jon Wardlaw-Milne, but this fell at the Report stage. Mr. Windsor introduced a similar bill in 1936, which again fell. The same Bill was reintroduced in 1937 by Mr. Holmes. This became the Inheritance (Family Provision) Bill, in which tribute was paid to Lord Astor.
Lord Russell of Killowen, on the Second Reading of the Bill in the Lords, introduced it as follows:
The present Bill has been framed upon those lines, and its provisions may be shortly stated. It enables the Court to make a limited provision out of a testator’s estate for the maintenance of the testator’s dependants. The dependants in question are a spouse, unmarried daughters, infant sons, and sons incapable either through mental or through physical capacity of maintaining themselves. They also include sons or daughters of those categories who have been adopted by the testator. The estate out of which provision is to be made is defined in such a way that the creditors and all other liabilities of the testator are paid before any provision is made. The nature of the provision is of this kind. It is a maintenance out of income with power in certain small cases to make a payment out of capital, but only in small cases. The maintenance provision ends in the case of a spouse with her marriage, in the case of an unmarried daughter with her marriage, in the case of an infant son with his attaining majority, and in the case of an incapacitated son with cesser of the incapacity. There is a limit to the provision which can be made: that limit is the maximum amount of income applicable at any one time, and it varies from two-thirds, which is the limit in cases where there are in existence both spouse and dependent children, to a half if there is no spouse but dependent children or if there is a spouse and no dependent child.
The Court which has to deal with the matter, which is largely one for the discretion of the Court, is the High Court, presumably the Chancery Division, and the two Palatine Courts of Lancaster and Durham. There is a time limit within which the application must be made—namely, six months from the date when representation in regard to the estate for general purposes is first taken out. Finally—and the House will perhaps think this most important—the Court has in every case a discretion, and must in exercising that discretion take into account the applicant’s other means, past, present and future; the conduct of the applicant in regard to the testator; and the reasons, such as they may be, prompting the testator to disinherit that particular claimant. Those are the provisions of this Bill, and I venture to submit them to your Lordships as reasonable and proper provisions to make.
Lord Maugham, the Lord Chancellor, described the Bill as “a model and useful amendment of the law”. However, the Bill had a difficult passage, but was eventually successful, and passed into law as the 1938 Act, coming into effect on 14 July 1939. The provisions described above are, of course, very familiar, but the 1938 Act made provision only for a spouse, an unmarried daughter, or one disabled and incapable of maintaining herself, an infant son, or a disabled son who is incapable of maintaining himself. It did not make any provision at all for children of the family, cohabitants or dependants. Other than the categories of claimants however, the standard of maintenance, though mostly out of income, is familiar, as is the six month time limit and various other elements.
The Intestates’ Estates Act 1952 extended the 1938 Act to intestate Estates. The Matrimonial Causes (Property and Maintenance) Act 1958 included ex-spouses in the category of claimants. The Family Provision Act 1966 made some minor revisions to the 1938 Act, including removing the proviso under which no application could be made by a surviving spouse where she had at least two thirds of the income of the net Estate; and by section 4 expressly making provision that maintenance could be by way of a lump sum payment; and by section 5 allowing discretionary extensions to the six month time limit. Section 6 provided for interim orders and section 8 included adopted children in the categories of claimants.
In 1973 the Law Commission reported by way of its First Report on Family Property: A New Approach, Law Comm No 52. It concluded that the claim of a surviving spouse upon the family assets should be at least equal to that of a divorced spouse, and the court’s powers should be as wide, and that there was no need or desire to introduce a principle under which the surviving spouse had a legal right to inherit part of the estate of the deceased spouse. Its Second Report on Family Property: Family Provision on Death (Law Comm No 61), printed on 31 July 1974, in essence recommended the 1975 Act. As the Lord Chancellor, Lord Elwyn-Jones, stated on its Second Reading:
There are four principal changes effected by this Bill. First, it raises the standard of provision which can be made for a surviving spouse and equates it more closely to that which can be made for a divorced spouse in matrimonial proceedings. It was indeed a central part of the Law Commission’s thinking that the court’s powers over a deceased person’s estate should be assimilated, so far as practicable, with its powers over the family assets on divorce. Secondly, it enlarges the class of persons who may apply for maintenance from the estate, to include all children of the deceased (and not only those who through age or disability were dependent on him) and to bring in any person who was dependent on the deceased, whether or not related to him. This will remove the hardship which can arise under the existing law whereby no provision can be made for a distant relative, or a non-relative who may have looked after the deceased for years, often without reward, and has become financially dependent upon him but derives no benefit under his will.
Thirdly, the Bill gives the court wider powers to make whatever order may be appropriate in the circumstances, whether in the form of periodical payments, a lump sum, a transfer or settlement of property, or variation of a previous settlement. Fourthly, to make these wider powers effective, the Bill makes additional property available for the purposes of financial provision: for example property which the deceased owned jointly with others, and property which the deceased had disposed of in his lifetime with intent to defeat claims for family provision. Those are the central features of the Bill. The basic theme is that the courts should have a wide discretion to deal with each case on its merits, freed from many of the restrictions which the existing law contains. This discretion is to be exercised with the help of some extensive guidelines contained in the Bill.
The scope of the 1975 Act was extended to cohabitants (without the need to show dependency) by the Law Reform (Succession) Act 1995. Cohabitants of course have no claim under the Intestacy Rules, and this reform provided an element of justice.
The relevant provisions of the 1975 Act are considered in detail throughout the below chapters, but the historical development of the law, from complete freedom of testation to the position at law now, are set out by Lord Hughes in his speech in the leading case of Ilott v The Blue Cross and Others [2017] UKSC 17:
“The key features of the operation of the 1975 Act are four. First, it stipulates no automatic provision; rather the will (or the intestacy rules) apply unless a specific application is made to, and acceded to by, the court and a specific order for provision is made. Second, only a limited class of persons may make such an application; they are confined to spouses and partners (civil or de facto), former spouses and partners, children and those who were actually being maintained by the deceased at the time of death. Third, all but spouses and civil partners who were in that relationship at the time of death can claim only what is needed for their maintenance; they cannot make a claim on the general basis that it was unfair that they did not receive any, or a larger, slice of the estate. Those 3 features are laid down expressly in the 1975 Act. The fourth feature is well established by case law both under this Act and its predecessor of 1938. The test of reasonable financial provision is objective; it is not simply whether the deceased behaved reasonably or otherwise in leaving the will he did, or in choosing to leave none. Although the reasonableness of his decision may figure in the exercise that is not the crucial test” [at 2]
As will be seen, the law has continued to develop, and will continue to do so, both on a common law and, potentially, a statutory basis from time to time. What follows relates to the practical application of this law in order to assist defendants resist claims brought against them by eligible claimants.