12 September 2014 by Michael Culver

Challenging an Estate is about to get easier

The Inheritance and Trustees Powers Act 2014 (the “ITP”) comes into force next month introducing a number of changes that will make it easier to commence a claim for provision from an estate.

Claims of this nature are commonly pursued under the Inheritance (Provision for Family and Dependants) Act 1975 (”The 1975 Act”). In order to bring a claim you must fit into a strict category of applicants.

One of the changes being introduced is to widen this category.

Widening the category of applicants 

Currently the 1975 Act allows a person (not being a child of the deceased) who is treated as a child of the deceased’s marriage to bring a claim. In other words, step children can pursue a claim. But, if the deceased was not married and the deceased and the child’s parent were merely cohabiting, no claim could be brought. This changes next month so that such children will be able to pursue a claim.

Further, the ITP has redefined the term “family” to include applicants that have enjoyed a relationship with a now deceased person similar to that of parent and child, so they will be able to bring a claim under the 1975 Act.

Currently, if an applicant does not fall into any of the other categories they can try and bring a claim as someone who was being maintained by the deceased. It is difficult to qualify under this category as they will need to show that they were being maintained by the deceased, that the deceased contributed more than they did and that the deceased had presumed responsibility for financially maintaining them.

The ITP has now altered this to enable people who were mutually dependent upon one another to pursue a claim with the effect being that if the applicant and the deceased were both contributing towards each other’s living expenses (mortgage/rent, living costs etc.) and the applicant cannot afford to meet such outgoings independently, and has not been provided for adequately by the deceased’s estate, they will be able to pursue a claim.

Furthermore, there is no longer any need to show the deceased had assumed responsibility for someone’s maintenance in order to bring a claim. The Court will consider the extent to which this occurred when determining how much to award, but it is no longer a hurdle to being able to commence a claim.

No need to delay the application

Following the implementation of the ITP it will no longer be necessary to await a grant of probate before pursuing a claim. At present a number of claims are either prevented or delayed because a grant of probate is not taken out (perhaps where all the deceased’s assets are owned jointly and therefore pass separately to their will).

No longer a time bar for jointly held assets 

There will no longer be a time limit on applications against jointly owned property. Currently if a claim is not commenced within six months of the date of a grant of probate being obtained the applicant cannot bring a challenge against jointly held assets that have passed automatically to the surviving owner. This is being altered by the ITP, so the Court can allow such a challenge if it feels it is just to do so.

Further, the ITP has confirmed that the Court can value the joint asset at the date the Court thinks appropriate rather than having to refer to the date of death valuation, which may have significantly changed by the time of trial.

Extended court powers 

The ITP now gives the Court power to vary trusts rather than just having to create new trusts. The Court will also be able to treat the net estate as including any payment that may occur as a result of such an order – for example, if a spouse is given an additional amount there will be less Inheritance Tax to pay due to the spouse exemption, so the Court can allow for these funds being refunded when making an order.

If you wish to discuss pursuing a claim of this nature, or wish to defend a claim being brought against an estate where you are the executor or a beneficiary please contact Michael Culver 020 7288 4741 michaelculver@boltburdon.co.uk and ask about our fixed fee appointment.

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