The recent case of Kaur v Singh is of note.

The claim was by a wife for reasonable financial provision from her late husband’s estate under the 1975 Act.

The Claimant had been married to her late husband for 66 years at the time of his death.  The deceased had made no provision in his Will for his wife or his daughters, instead leaving his entire estate to his sons.

Details

The Claimant married the deceased in 1955.  They had seven children together with six surviving the deceased (two sons and four daughters).  The Claimant had played a prominent role in the marriage in that she raised seven children and had worked in the family clothing business.  She had no stake in the family business and had drawn no salary.

The Claimant had modest assets and her only income was through state benefits. She suffered from health issues and had complex care needs.  She had moved in with one of her daughters as a result of these.

The Judge found that the Claimant had ‘made a full and equal contribution to the marriage’ in accordance with the seminal family case of White v White [2000] UKHL 54 and was “financially dependant” on her husband.  The White v White case is significant, as it takes as its starting point in divorce proceedings that the parties are entitled to a 50/50 division of matrimonial assets regardless of their respective roles within the marriage.  It is then for the parties to make arguments to the Court to show, if they seek to argue it, why there should be a departure from equality.

In this case, all of the family’s wealth had been built during the marriage and the Claimant estimated the value of the deceased’s gross estate at approximately £2,000,000.

The Judge considered the factors relevant to the claim, which are set out under section 3 of the 1975 Act, and, in particular, the deemed divorce test, which is set out at section 3(2).  This section provides that the Court shall ‘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 divorce order’.

Decision

The Judge found that a reasonable financial provision had not been made for the Claimant and stated this is ‘the clearest possible case entitling me to conclude that reasonable provision had not been made for C.  It is hard to see how any other conclusion can be reached’.

He found that the divorce test pointed towards an award of 50% of the gross estate, noting that this would meet the Claimant’s needs.

Commentary

This case is significant for a number of reasons:

1.            The Family Division – Most 1975 Act claims are brought in the Chancery Division of the High Court or the County Court, whereas this case was brought in the Family Division.  The Family Division is the forum for family and divorce cases.  The Chancery Division has a reputation for being rather exact in its standards and its judgments.  The Family Division, by its very nature, is more used to divorces and perhaps the weaknesses of human nature.  If the matter had been brought in the Chancery Division, perhaps a tougher outcome would have been made with the Claimant receiving less.

2.            The Divorce Test – Whether in the Family Division or the Chancery Division, the fact that the Judge has put such great store around the divorce test sets a precedent, and it will be interesting to see whether this is followed as strictly as it was in this case by the Court going forward. Often when dealing with an older spouse, in this case the Claimant was 83, a defence is often raised that the reasonable financial provision required should only be enough to cover the remaining life expectancy of the claimant.  So for example, rather than receiving half of the estate, the Judge could have worked on the basis that she be awarded a sum to perhaps cover her needs until she died, which, without meaning to be morose, were likely to be less.

3.            No Defence – The estate of the deceased and its beneficiaries did not run any active defence to this claim.  One son was uncommunicative and the other chose not to do anything.  As such, there were no counter-arguments to the claim.  As the reader will appreciate, this may have had a significant impact on the Judge’s decision.  For example, had the limited life expectancy argument been run, this is something that the Judge may have taken into account.

4.            12 Weeks – The Court did consider the Claimant’s position to be urgent and listed the matter for a hearing within 12 weeks of issue on the basis that the Claimant made an application to have the matter disposed of summarily.  This does give the impression that the Court was sympathetic to the Claimant’s plight.

5.        Costs – The Judge ruled that the Claimant’s costs were to be paid from the gross estate before it was divided and the Claimant paid her share. The 1975 Act usually deals strictly with the net estate after all deductions have been made.

Conclusion

This case would appear to indicate that the Court is sympathetic to situations where no financial provision is made for a spouse.  

The fact that it expedited matters and gave such clear guidance around the divorce test also reinforces this belief.

We will need to watch this space to see whether future cases are dealt with so straightforwardly using the divorce test in scenarios where a spouse claims for reasonable financial provision under the 1975 Act.

Should you have any questions in relation to this case or the Inheritance (Provision for Family and Dependants) Act 1975, please do not hesitate to contact Graham Mead, a partner in this firm’s commercial litigation team, on 01473 298234 or gmead@prettys.co.uk.