This article was written by Barny Croft from our Disputed Wills and Trusts Team.
The claimant, Joan Thomson, was an elderly lady who had no property, only £2,500 in savings and was entirely reliant on disability benefits by way of income. Joan's partner of around 42 years, Wynford Hodge, did not make any provision for her in his will on the basis that she had her own money and her own savings, but mainly, it would seem, because he did not want Joan's children (with whom he had had disagreements) to receive any benefit from his estate, whether directly or indirectly. His net estate was in the region of £1,500,000.
As a cohabitee and as a dependant of the Deceased, Joan was entitled to bring a claim for such provision as would be reasonable in all the circumstances of the case for the applicant to receive for their maintenance (section 1(1)(ba) and section 1(1)(e) of the Inheritance (Provision for Family and Dependants) Act 1975).
It was sensibly accepted between the parties that the Deceased had not made reasonable financial provision for the Claimant and the Court agreed: the fact that the Deceased did not want his assets to fall into the hands of C's children was not sufficient reason for having left C without financial provision.
The issue that remained, however, was how much Joan should be awarded from the estate. Joan asked the Court to transfer the matrimonial property to her (as opposed to her being given either a life interest in the property or access to an alternative property), with an additional lump sum to enable her to modify the property to meet her needs, annual costs of maintaining the cottage, general outgoings and the costs of a suitable care package.
Surprisingly to many, in deciding in Joan's favour the Court awarded her the matrimonial property instead of the anticipated life interest, as well as the payment of £28,844 by way of a lump sum in respect of renovations and moving costs, and a capitalised sum of £160,000 for the on-going cost of living. The Court had regard to the tension between the parties and that a clean break would facilitate the parties with moving on from the litigation. It would also enable Joan to take decisions relating to her home, such as making structural alterations or raising money without the need to seek permission.
The "surprise" factor was that many would have expected the Court to award Joan a life interest in the property, in large part due to the recent key case of Ilott v The Blue Cross and others [2017] UKSC 17. In Ilott the Supreme Court emphasised that the purpose of the 1975 Act is to provide maintenance, not to confer capital. Accordingly, where housing is to be provided for a claimant's maintenance, it is likely to be provided by way of a life interest rather than by way of a lump sum or an outright transfer of property. The reminder in Ilott was far from welcome by charities in particular, whose best interests will rarely be served by the Court delaying for an indefinite period their access to a property bequeathed to them in an estate.
Although not a landmark decision, the Court's present decision to award a transfer of property over a life interest comes as welcome encouragement to claimants and to charities alike: claimants will nearly always prefer a clean break from remainder beneficiaries with whom they will rarely have a positive relationship, and charities will generally prioritise ready access to assets that can be liquidated in order to further their charitable objectives within a foreseeable period.
If you have questions regarding the above case, or claims for reasonable financial provision, please contact Barny Croft, Senior Associate in Ashfords' Disputed Wills and Trusts and Estate's Team on 0800 0931 336, or b.croft@ashfords.co.uk.
Contact our Disputed Wills and Trusts Team on freephone 0800 0931336, or by email willdisputes@ashfords.co.uk for a no obligation chat to see how we can help you.
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