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Ch 7 Family Provision and Post-death Variations, Post-death variations and…
Ch 7 Family Provision and Post-death Variations
how does the Act work?
It allows certain categories of people who may be aggrieved they have been left out of will/ not inheriting on intestacy, to apply to court for a benefit from estate. Can also apply if you get SOME benefit, although not as much as you would like
what are the categories of applicant under the Act?
spouse or civil partner of deceased; 2. former spouse or CP who has not remarried (except where barred); 3. child of deceased; 4. any person treated by deceased as a child of the family in relation to any marriage or CP of the deceased, or otherwise in relation to any family in which the deceased at any time stood in the role of a parent; 5. any person who, immediately before death of deceased, was maintained by them, either in whole or part. 6. any person who, during the whole of the period of two years ending immediately before the date when the deceased died, was living: (i) in the same household as the deceased, and (ii) as the husband, wife or CP of the deceased.
when can a child of the deceased make a claim?
harder if adult child
> if they are in employment and likely to have earning capacity in the forseeable future, it is unlikely their application would succeed without some special circumstance such as: 1. a moral obligation owed by the deceased, 2. the adult child having a disability, 3. the adult child working for the deceased for many years for a low wage; or 4. the child making sacrifices to care for the deceased.
when can a person (not being a child of the deceased) who was treated as a child make a claim?
step-children succeed under this but they have to prove the deceased acted as a parent towards them.
financial dependency
requirement is that they were maintained wholly or partly by the deceased. 'maintained; if the deceased was making a substantial contribution in money/ money's worth to the reasonable needs of the applicant otherwise than for FULL VALUABLE CONSIDERATION pursuant to an arrangement of a commercial nature.
rent free accommodation = an example
cohabittee
any person living in same household as deceased and as their partner during whole period of 2 years immediately before the death. must satisfy 3 conditions: 1. must live in same household as deceased; 2. as the husband, wife or CP; and 3. must have been for the whole of the two years IMMEDIATELY preceding the deceased's death
Applications must be made within 6 months from the date of the grant of representation. Application can be made before issue of grant.
Applicant can make a standing search which ensures the applicant is notified of any grant which issues in the following 6 months
Court has DISCRETION to extend time limit but will only do so with good reason.
If PRs distribute the estate within 6 months of the grant and the court allows a claim for fmaily provision= PRs are personally liable to satisfy the claim. If they wait then PRs will not be personally liable and the applicant may be able to recover property from the Bs
ONLY GROUND FOR MAKING CLAIM!
is that 'the disposition of the deceased's estate effected by his will or the law relating to intestacy, or a combination of his will and that law, is not such as to make reasonable financial provision for the applicant'. OBJECTIVE TEST. Burden on applicant to fulfil
what are the two standards for test?
SURVIVING SPOUSE STANDARD - allows surviving spouse or CP such financial provision as is reasonable in allt he circumstances 'whether or not that provision is required for his or her maintenance'. a relevant factor= how much they might have got on a divorce
ORDINARY STANDARD - allows them such financial provision as it would be reasonable in the all the circumstances for the application to receive for his maintenance > limitation to maintenance here means a person who is able to pay for their living expenses out of their own resources will not get an award
common and special factors apply!
SPECIAL FACTORS: where applicant= surviving spouse/ CP, court considers their age and contribution to the welfare of the family, duration of marriage or CP and likely financial settlement if that ended in divorce or dissolution rather than death. On an application by a child of the deceased the applicant's education or training requirements are considered. where a cohabitant, court consider their age, length of the period of cohabitation and contribution made by the cohabitant to the welfare of the family (including looking after the home or caring for the family)
net estate = not only property which the deceased has, or could have, disposed of by will, but also the deceased's share of joint property passing by survivorship if the court so orders.
Post-death variations and disclaimers
lifetime gift
post-death disclaimers > disclaimed assets then pass as through the OG B had predeceased. If someone disclaims their legacy they will be regarded as making a PET. PET= chargeable if die within 7 years.
post-death variations > A B who varies a benefit can direct where benefit is to go and on what terms. in effect, the OG B re-writes the deceased's will or intestacy rules. Can also be used to redirect the deceased's interest in joint property which passes by survivorship. B must be aged 18 or more and have mental capacity. If the B is not legally capable of effecting the variation, and application could be made to the court. Court has power to consent for for infants and people who lack capacity and cannot consent for themselves, provided the variation is for their benefit.
s142 IHT Tax Act 1984 allows variations to be 'read back' into the will. It is as if the testator gave the legacy direct to the new B. certain conditions have to be met for the variation or disclaimer to be read back to the deceased's death. the disclaimer or variation must be:
in writing and signed by the OG B;
is within 2 years of the deceased's death; and
is not made for a consideration in money or money's worth
must state s142 IHTA 1984 is to apply
CGT considerations >