As another family provision claim succeeds, the question we now have to ask ourselves is whether testamentary freedom still exists in the UK? Can you still choose who to provide for and more importantly, and to the point, who not to provide for in your Will? Has the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act) completely eroded our right to choose our beneficiaries in our Wills? Do we now have a moral, perhaps even legal, obligation to make provision for certain family members and dependants?
For those who are not aware, the 1975 Act provides that certain people have the legal right to make a claim against your estate for reasonable provision to be made for them from your estate. Although they have the right to make the application (as long as they do so within the provided timeframe), it is then for the court to decide what reasonable provision to make for them (if any) taking into account all the circumstances of the case.
The categories of people that have a right to bring a claim against your estate are:
- Your spouse or civil partner
- Your former spouse or civil partner who has not remarried or entered into another civil partnership
- Your partner if he or she was living with you as husband/wife for the last two years of your life
- Your children
- Your dependants
- Those that you have treated as children of the family (such as step-children)
Many 1975 Act decisions that have been handed down by the courts seem to go totally against the decision of the testator in a way that seems to confirm the erosion of testamentary freedom. Take for example the Illot case, which was widely covered by the media. In that case, the testatrix decided to leave her whole estate to charity and cut out her daughter, from whom she was estranged. The Supreme Court decided that provision should be made for her from the estate.
However, occasionally a case comes along that makes you think differently about testamentary freedom. After reading this (rather long) summary of the case of Thompson v Ragget and others, many will feel justice was done by the use of the 1975 Act powers.
The claimant, Joan Thompson sought reasonable financial provision (under the 1975 Act) out of the estate of her late partner of over 40 years, Wynford Hodge, who died on 4 February 2017 in his 90’s.
Mr Hodge left a Will dated 19 December 2016. In his Will, he left his entire estate, after payment of expenses and debts to Karla Evans and Agon Berisha. They were tenants of one of his properties and had occupied it since early 2015. He made no provision in his Will for his partner, Mrs Thompson, from his vast estate with a net value of £1,535,060.
The firm of solicitors that drew up the Will did what any experienced solicitor would in those circumstances. They got Mr Hodge to explain the reason behind his decision to leave Mrs Thompson out of his Will, something I always advise testators to do in those circumstances.
Mr Hodge left a letter of wishes of the same date as his will and in it he stated:
“In my Will, I have specifically made no provision for my partner, Joan Thompson and her children, Gary, Lee, Dean and Sharon. I currently have no contact with Joan’s children. I have no issue with Gary, but I have concerns regarding Lee, Dean and Sharon and do not trust them. I feel that they have previously taken advantage of me and have already received/taken monies from me during my lifetime. I do not want Joan or her children to inherit from my estate.”
His detailed letter set out instances to justify the reason for his mistrust. He then went on to say:
“I no longer want to leave my residuary estate on trust to pay the income to Joan for her life as this would be a substantial sum and I do not believe she will need it. Also due to Joan’s health, I believe she would not be able to live in my property independently. I am Joan’s main carer and envisage she may have to go into a home following my death. I confirm Joan has her own finances and is financially comfortable. Joan has her own money and her own savings.”
As is usual in 1975 Act cases, the court first has to consider whether the applicant is entitled under the Act to apply. Mr Hodge and Mrs Thompson had lived together for 42 years as man and wife. She was also financially dependent on him throughout that time up until he died. As a result, she was entitled, under two heads of the 1975 Act, to apply for reasonable provision from the estate.
Following the finding that an applicant is entitled to apply, the court has to then decide what financial provision would be reasonable in all the circumstances of the case for that person to receive for his/her maintenance.
Mr Hodge and Mrs Thompson lived in a farmhouse and as they grew older they each had health issues and relied on each other to provide care. However, in the last few years, she needed more care than he did. After a bad fall in 2015, she went to live in a local nursing home. She left the nursing home because Mr Hodge wanted her home and as the farmhouse was not suitable for her to live in based on her condition, they moved into a caravan near the farmhouse.
In 2016, Mr Hodge bought a property, Elidyr Cottage, with a view to both of them moving into it. Before they could move in, Mr Hodge was admitted to hospital and died shortly thereafter.
Mrs Thompson returned to live in a nursing home. Contrary to Mr Hodge’s suggestion in his letter of wishes, she did not have much to live on, however. She had modest savings of around £2,500 and state benefits of £1,114 per month. Mrs Thompson wanted to leave residential care and live in private accommodation. She had recently reconciled with her son Dean and his wife Janet who said they would be happy to move in with her and care for her.
The judge had to decide what would be reasonable provision to make for Mrs Thompson’s maintenance. He accepted that the powers of the court in this regard are very wide and would include her accommodation and care. The judge said regard must be had to Mrs Thompson’s financial resources, which he accepted were very modest, as well as her needs now and in the foreseeable future.
The judge considered the two heads of Mrs Thompson’s claim. In respect of her claim as a cohabitee, the judge said regard should also be had to her age (79), the period of cohabitation (42 years) and her contributions to Mr Hodge’s welfare including looking after the home and also looking after his mother whilst she was alive.
In respect of her claim as a dependant, regard must be had to the length of time and the basis on which Mr Hodge maintained her, the extent of the contribution, and the extent to which he assumed responsibility for her maintenance.
He pointed out that under the 1975 Act, regard must also be had to the resources and needs of the beneficiaries of the estate, in this case, Ms Evans and Mr Berisha. The judge found that they carried on a subsistence lifestyle on the land with little savings. However, against that, he also considered what responsibility Mr Hodge had assumed towards his tenants Ms Evans and Mr Berisha and found that if he had assumed any responsibility towards them, it was a very small one.
The judge considered all aspects of the case and came to the conclusion that it was reasonable to provide accommodation for Mrs Thompson in Elidyr Cottage, which was the reason for which it had been purchased. He then had to consider whether it should be transferred to her outright or by virtue of a life interest only. Citing the recent case of Illot v The Blue Cross and others, he said the emphasis should be on providing maintenance and not capital.
The judge distinguished cases in which capital had been given saying it was because in those cases there had been such animosity that a capital gift was the only way in which the parties could move on separately with their lives. In this case, there was no such animosity between Mrs Thompson and the beneficiaries. He, therefore, decided that Mrs Thompson should have a life interest with the ability to make decisions relating to her home, such as making structural alterations or even raising money, without the need to seek permission from anyone. The judge also made a financial award to enable the cottage to be adapted to Mrs Thompson’s needs. He then made a total award of £160,000 to her for her maintenance.
Although the judge did take cognisance of the fact that Mr Hodge did not wish Mrs Thompson’s children to benefit in any way from any provision for her, he pointed out that it should not hinder the reasonable provision for her maintenance. The judge said: “That is the mistake that he made in his letters of wishes which led to no provision at all being made.”
Many will feel that in this particular case, justice was done, especially given that Ms Evans and Mr Berisha would still be left with by far the major part of a rather substantial estate.
The reason that many will support the decision of the judge in the case is that Mr Hodge’s decision not to leave anything for his partner of 42 years was because he was worried that her children would somehow benefit from any provision for her. He also seemed to be under the impression that she had enough to look after herself.
I do wish Mr Hodge’s solicitors could have found ways to persuade Mr Hodge to use a life interest to provide for Mrs Thompson with appropriate safeguards built in. I am sure they tried but failed, given that he had made many Wills in the past, some of which left gifts to her on a life interest. In the end, however, I think that Mr Hodge’s mind was so poisoned against his partner’s children that he was prepared to cut her out rather than risk her children getting their hands on his money. His mind was completely made up.
Back then to the question in my opening paragraph: “Is testamentary freedom alive and well?” I think most practitioners would say that the 1975 Act has greatly eroded testamentary freedom, and I’m not sure that can be a good thing. There is a great sense freedom that comes with being able to leave your estate to anyone you wish, including charity, and most especially where you have lavished great amounts on the would be beneficiaries in your lifetime. Many of the ultra-wealthy have said they will not leave anything in their Will to their children and intend to leave all their wealth for philanthropic purposes. If that is you then you will have to consider using lifetime trusts to tie everything up before death, because your children can go to court for reasonable provision under the 1975 Act.
However, in a few cases, such as this one, I find myself moving away from my usual position in support of testamentary freedom. Perhaps some people do things that are not fair. I think that the 1975 Act has the ability to right moral wrongs especially in this case of a 79-year-old, who through no fault of her own, gets cut out of the Will of her partner of 42 years for whom she had cared over the years until illness robbed her of the ability to do so. In these circumstances, I think many will agree with me that it is a good thing we had the 1975 Act to right the wrongs of this case and give some justice to the claimant. What do you think?