It is thankfully a relatively rare circumstance, but it does sometimes happen, whether by design or otherwise, that a person will fail to leave sufficient financial provision for their spouse from their estate. The law, of course, provides the surviving spouse with a remedy, contained in the Inheritance (Provision for Family and Dependants) Act 1975.
Very briefly, the Act provides that the spouse (or civil partner) of the deceased may apply to the court for an order for “such financial provision [out of the estate] as it would be reasonable in all the circumstances of the case for a husband or wife to receive, whether or not that provision is required for his or her maintenance”. The Act sets out a list of factors that the court should take into account when considering such an application, which is very similar to the list of factors that a court should take into account when considering a financial remedies claim on divorce, and provides that:
“…In the case of an application by the wife or husband of the deceased, the court shall also, unless at the date of death a decree of judicial separation was in force and the separation was continuing, have regard to the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce”
A High Court judgment handed down by His Honour Judge David Cooke last week shows these principles in action (or not, as the case may be), and also in particular deals with the issue of delay in making an application.
The judgment is in the case Sargeant v Sargeant & Another, which concerned an application made by the wife of the deceased more than ten years after her husband’s death. Now, section 4 of the Act (not section 2, as mistakenly stated by Judge Cooke) provides that an application must be made within six months from the date of the grant of probate, after which it can only be made with the permission of the court. Here, the grant of probate was issued in March 2006, and the wife did not make her application until July 2016 – a delay longer than in any reported case in which permission had been granted. Accordingly, the wife required permission to proceed with her application.
Now, I’m not going to dwell too long on the details of the case, as it is quite fact-specific. However, briefly the husband had left the majority of his estate, which was worth some £3.2 million, to his executors as trustees on terms of a discretionary trust. The potential beneficiaries of the trust were limited to the wife, the couple’s only child, and her children. However, the husband left two letters of wishes addressed to the trustees, one of which stated that it was his wish that for so long as she is alive, his wife “should have all the benefit from [his] assets unless she specifically says that she does not want everything.”
The basis of the wife’s application was that the income that she received from the trust was not sufficient to meet her needs. She claimed that, for the entire ten year period (or at least most of it) she had misunderstood the terms of the discretionary trust, believing that she was the owner of half of all the matrimonial assets.
HHJ Cooke rejected this claim, finding that the wife was fully aware of the implications of the discretionary trust by at least 2011, at the very latest. In order to succeed with her application for permission to proceed with her claim out of time she had to show not just that she had an arguable claim (as she did), but also that she was not responsible for the delay. Here, Judge Cook found that:
“The reality is that [the wife] took her own decision to continue to work within the arrangements provided for by the will rather than to explore whether she had any option available to vary them, in the full knowledge of the financial difficulties she was under, and maintained that decision over a very long period.”
“In all this time the trustees, and [the daughter] in particular, have continued to manage the assets, and [the daughter] and her family have had the legitimate expectation that they would eventually inherit them in accordance with the will and [the husband’s] wishes. Given the very extensive delay, the operative cause of which was [the wife’s] own failure to take any steps to explore whether she could disturb those arrangements, it would not be right to give her permission to do so now.”
You can read the full report of Sargeant v Sargeant, here.
Photo by Tom Woodward via Flickr under a Creative Commons licence.