The adult child’s “wish list”: what will the court consider?
The Inheritance (Provision for Family & Dependants) Act 1975 allows children of the deceased to make an application to court for reasonable financial provision, if the Will of their parent fails to do so.
What matters will the court consider when making an order? In the recent case of Re H (Deceased) 2020, the Honourable Mr Justice Cohen was faced with the task of assessing an adult child Claimant’s “wish-list” of claims against the estate of her late father.
The Claimant had been estranged from her parents and had been independent of them for several years. She had been diagnosed with mental ill-health conditions which prevented her from finding employment.
The Claimant’s elderly mother lived in full-time residential care due to her age and health conditions and was worried that the Claimant’s claim would mean there would not be enough money left to continue to pay for her care.
The Claimant’s brother, the only other child of the deceased, was a successful businessman who wanted to protect the financial estate in order to fund his mother’s care.
The Financial Claims
Any award made to the Claimant would reduce the amount due to her elderly mother, the sole beneficiary under the Will. The Claimant asked the Court for the following:
- A 2-bedroom flat at between £350,000-£500,000;
- A fund for continuing psychotherapy for 3 years costing up to £23,100;
- A capital sum to replace her car and white goods;
- A fund to meet the shortfall in her living expenses amounting to £48,000 over 3 years; and
- A success fee payable to her solicitors in the sum of £48,175.
At the trial, the Estate was valued at around £554,000 and any award to the Claimant over £325,000 would result in increased inheritance tax. It was apparent to the Honourable Mr Justice Cohen that the Estate simply could not afford to meet all of the Claimant’s claim.
The Honourable Mr Justice Cohen concluded that the Claimant’s mother’s needs had priority and that she must be able to meet her care home costs for the rest of her life, as per the wishes of the deceased.
He noted that the Claimant by her estrangement had demonstrated that she was not financially dependent on her parents. Most importantly, Justice Cohen noted that the Claimant’s “wish-list” was in fact not in the correct priority order. The Claimant listed a 2-bedroom flat as her top priority order, whereas Mr Justice Cohen considered her top priority should be “to get well again”.
How did this affect the order?
Justice Cohen found that the Will did not make reasonable financial provision for the Claimant. In deciding what award would constitute reasonable financial provision, Justice Cohen stated:
“[The] award should be calculated by reference to what the Claimant requires to meet her current financial needs. It is not a case where the Claimant should, in effect, be set up with a home or income fund for life”.
Therefore, he ordered that the Claimant should receive:
- £17,000 for therapy for 3 years;
- £48,168 for the short fall in the Claimant’s living expenses for 3 years;
- £32,000 to compensate for the loss of universal credit for 3 years;
- £15,000 for a new car and white goods;
- £10,000 to cover the deposit and moving costs for a new rental property; and
- £16,750 towards the success fee payable to her solicitor.
The total awarded to the Claimant was £138,918 which, disregarding costs, would leave around £415,082 to be distributed as per the Will.
Whilst every 1975 Act claim is decided on its own unique facts, the Court will consider not just the Claimant’s financial needs, but any other relevant circumstances as well as the needs of any other beneficiaries, both at the time of the trial and in the foreseeable future.
For more information on the topic, please contact Stephanie Kerr at Brabners LLP.