Inheritance Act claims – delay might not pay
A recent application to bring a claim under the Inheritance Act almost 10 years after the time limit set out in the legislation has failed. A claim for reasonable financial provision from an estate under the Inheritance (Provision for Family and Dependants) Act 1975 must be issued within 6 months from the date of the grant of probate. To issue a claim after this time the court’s permission is required.
The recent case of Sargeant v Sargeant and Thomson [2018] EWHC 8 (Ch) demonstrates the problems claimants have convincing the court that permission to bring a claim should be granted when there has been an extensive delay, even in circumstances when a prompt claim may have been successful.
Joe Sargeant died in May 2005 and a grant of probate was obtained jointly on 30 March 2006 by his wife, Mary, his daughter, Jane, and Mr Thomson, the family solicitor. Under the terms of his 2002 will Joe left only guns and fishing equipment to his adopted son Jeff (Mary’s son prior to their marriage). Mary received the benefit of a life policy worth around £75,000. The rest of Joe’s estate, valued at around £3.2 million, passed into a discretionary trust for the benefit of Mary, Jane and Jane’s descendants. Joe left two letters of wishes as guidance to the trustees, which suggested that Mary receive Grafton House and the income from the remaining assets for her lifetime.
At the time of Mary’s application for permission to bring her claim out of time it was thought that due to planning permission obtained on land passing into the discretionary trust the value could be over £8 million. However, the trust was asset rich and cash poor. Mary was struggling to get by on the income she was receiving from the trust assets and discussions between the trustees about how this could be addressed had not resolved the situation.
In applications like these the court will consider the factors set out in the case of Re Salmon [1981]. These highlight the burden on the claimant to establish a substantial case for the claim to proceed despite being brought out of time. How promptly and in what circumstances the claim is being made is material, as is whether any negotiations were underway. The court will also consider whether the estate had been distributed before a claim has been intimated or made and whether the claimant has any other form of redress if permission is not given.
In the Sargeant case Mary argued she had not understood her position as a discretionary beneficiary and that she had believed she was the owner of half of all the matrimonial assets. Mary alleged that Joe had always dealt with the finances and that following his death she had deferred to Jane’s wishes. Mary further said she had no idea that she could bring an Inheritance Act claim until she received advice in 2016. She also highlighted that the assets of the estate had not been distributed.
However, the judge refused Mary the permission sought. The judge acknowledged that Mary did have an arguable claim but that she had “not made out a sufficient case that it is right and just to permit” her claim to proceed. The judge found that it was likely Mary had understood the implications of the discretionary trust and that she had chosen to work with it rather than to explore any alternative options that may have been available, despite being aware of her own financial difficulties. The judge considered Mary quite capable of taking independent legal advice. It was determined that Jane and her family had a legitimate expectation they would inherit the estate assets and that Jane in particular had been managing them.
This case highlights the importance of potential claimants taking independent legal advice at the earliest opportunity from a solicitor specialising in this area. Although the outcome of an Inheritance Act claim made much earlier by Mary cannot be certain, as Joe’s spouse she would have been entitled to such reasonable financial provision as would be considered reasonable in all the circumstances, whether or not it was needed for her maintenance. Due to the lengthy marriage, Mary’s own limited assets and the large estate this could have led to a significant award in Mary’s favour, though the court would have had to consider the make-up of the estate and the position of the other beneficiaries.
Emma Saunders is a Senior Associate at Newcastle law firm Sintons specialising in contentious probate matters, including Inheritance Act claims. To speak to her please call 0191 226 3293, or email her at emma.saunders@sintons.co.uk.
