Steps that can be taken to try and avoid a successful claim being brought under the Inheritance (Provision for Family and Dependants) Act 1975
This article summarises and adds to a previous article on this subject, which can be found here.
Under English law, by making a Will individuals are free to choose who will inherit their estate. However, the court has the power to modify a Will if it is satisfied that it does not make ‘reasonable financial provision’ for certain categories of person, as seen in the recent case of Illott v Mitson and as reported here.
There is no cast iron way to prevent someone making a claim but there are steps that can be taken to try and minimise the chances of an application being successful.
- It may be worth the testator attempting a frank conversation about the Will with any potential claimant before it is too late, particularly where they are expecting an inheritance. Managing expectations in this way will hopefully reduce the risk of a claim.
- A carefully drafted ‘letter of wishes’ to the Will, setting out why someone is being excluded from benefit in favour of others, will give the court the opportunity to consider the testator’s reasons for the omission.
- To discourage a claim from being brought in the first place, the Will could include a forfeiture (or ‘no contest’) clause, which leaves a small legacy to the potential claimant provided they do not bring a claim against the estate.
- The use of a discretionary trust in the Will should also be considered; this may allow the trustees to negotiate a solution with a potential claimant named as a beneficiary, or who could be added as a beneficiary at a later stage, before any claim is brought.
While steps 3 and 4 will result in the potential claimant inheriting something, this could be significantly less than an award following a successful claim to court.
For more information, please contact the partner having responsibility for your affairs or any partner in the Private Client Department.