Reasonable financial provision under the Inheritance(Provision for Family and Dependants)Act 1975

Miles & Shearer v Shearer [2021] EWHC 1000 (Ch) is a claim that was brought against the estate of Anthony Presley Shearer by his two adult daughters Juliet and Lauretta. At the time of the action Juliet was 40 years old and Lauretta 39 years old. The claimants brought an action against the estate seeking an order for reasonable financial provision by way of maintenance, on the basis their father gave generous financial provision to them during his lifetime, pursuant to the Inheritance (Provision For Family and Dependants) Act 1975.

Juliet and Lauretta were the children of the Deceased’s first marriage. The Deceased did not have any other children. The Deceased had remarried, and at the time of his death remained so to Pamela Leslie Shearer, the executrix and beneficiary of the estate. By his will dated 2nd February 2015 the Deceased made no provision for his adult daughters and the principal beneficiary was the second wife, Pamela. Probate was granted on 14th May 2018 and the net value of the estate in the United Kingdom was £2,190,226 and in France assets were valued at £3,574. The estates did not include a property owned by the Deceased and his wife Pamela  or a property in Provence which passed to Pamela upon his death.

Inheritance (Provision For Family and Dependants) Act 1975 (hereinafter referred to as ‘the 1975 Act’)

The 1975 act enables a claimant to make an application under Section 2 for financial provision from the Deceased estate if they are within one of the listed categories within Section 1. Each of the claimants were entitled under Section 1(c) as a ‘child of the Deceased’ to seek ‘reasonable financial provision’ from the Estate.

In determining the application, the court will consider the factors contained in Section 3 of the 1975 Act which are as follows:

Section 3 Matters to which court is to have regard in exercising powers under s. 2.

(1) Where an application is made for an order under section 2 of this Act, the court shall, in determining whether the disposition of the Deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is such as to make reasonable financial provision for the applicant and, if the court considers that reasonable financial provision has not been made, in determining whether and in what manner it shall exercise its powers under that section, have regard to the following matters, that is to say—

(a) the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;

(b) the financial resources and financial needs which any other applicant for an order under section 2 of this Act has or is likely to have in the foreseeable future;

(c) the financial resources and financial needs which any beneficiary of the estate of the Deceased has or is likely to have in the foreseeable future;

(d) any obligations and responsibilities which the Deceased had towards any applicant for an order under the said section 2 or towards any beneficiary of the estate of the Deceased;

(e) the size and nature of the net estate of the Deceased;

(f) any physical or mental disability of any applicant for an order under the said section 2 or any beneficiary of the estate of the Deceased;

(g) any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.

The Court is provided with a statutory framework to use in making its decision. There are two questions to ask: (1) has there been a failure to make a reasonable financial provision; and if so (2) what order ought to be made by the court.

When considering the factors, the Judge considered that reasonable financial provision for these claimants is what would reasonably maintain them. The claimants had to demonstrate that they should be maintained from the Estate, as there was an obligation or responsibility which was not being fulfilled. It was noted in this case that the claimants were both adult children who had lived their own financially independent lives, the last gift from their father being in 2008. It could not be said in this case that the adult children were being maintained by the Deceased. There is no statutory definition. In the case of Ilott v The Blue Cross & Ors [2017] UKSC 17 ‘maintenance’ is described as something which “ cannot extend to any or everything which it would be desirable for the claimant to have. It must import provision to meet the everyday expenses of living”

The evidence.

The Judge did not find the evidence of the claimants or their mother to be satisfactory but “there is no question of their having deliberately misled the Court………. I have no doubt that each had convinced herself as to the correctness of her recollection and impression of her respective relationships with Tony and with Pamela but, to a greater or lesser extent, each of them had an axe to grind and was not in any sense objective. “

Whereas conversely, he considered the evidence of the defendant, the executrix and beneficiary of the estate of the Deceased to be ‘a straight forward and objective witness who gave her evidence in a measured and dignified manner’.

The claimants had sought to convince the Court that Pamela had influenced their father, the Deceased, over the years of their marriage to their detriment. The claimants’ relationship with their father had suffered following his divorce from their mother when they were both young adults and as a consequence of his relatively quick marriage just one year later to Pamela with whom he’d worked with. The Deceased had been successful in finance and had been, at one point, chief executive officer of a large financial company. The claimants had been both privately educated and had the opportunity to go to University, however both of them failed to complete their degree courses.

Pamela had given evidence that her late husband considered his children to be wayward and out of control in their teenage years and he told her that both claimants referred to him as the ‘chequebook’, which he found hurtful. The Court preferred Pamela’s evidence, dismissing the claimants’ suggestion that Pamela had influenced their father.

The Deceased had gifted money to both claimants in 2008 following the sale of a property that he had invested in many years before; Juliet receiving £177,000 and Lauretta £185,000. When the Deceased met with his children to provide them with their cheque, he had told them that he would not be able to assist them financially in the future. The Deceased advised his children to use the money wisely and invest in property, which they did. Neither claimant received financial support from the Deceased after the gifts in 2008, despite their requests.

In the last decade of his life, he went through periods of estrangement with both claimants and they made important lifestyle choices without an expectation of financial support from him.

Pamela gave evidence that the Deceased did not always enjoy seeing his children because they would often ask him for money, and was able to produce a letter into evidence that the Deceased had written but was undated to Lauretta following an unpleasant dinner party at her home. The computer data confirmed the date of the document was 30th May 2008. Within that letter, the Deceased had set out information in relation to finances stating that he intended to live a long time and spend all of his money. Within the letter, the Deceased stated, ‘you have already received almost everything that you can expect’. Lauretta denied having ever seen the letter.

It seemed the Deceased often wrote to his daughters expressing his thoughts and feelings and there was another letter from 2008 produced into evidence as well as one he sent to both daughters on 17th September 2009. Within the letter, the Deceased expressed his love for them both and expressed his sorrow at Juliet not having accepted Pamela. The letter did not mention money, but it was consistent with the Deceased’s expectation that both claimants would make their own way financially after the gifts made by him in 2008. These letters sought to support the case advanced by Pamela.

Juliet married, living for some time on an army base with her husband, which the court noted was a lot less luxurious than the life she was seeking to have met by maintenance from the estate now. They divorced during her father’s lifetime and she had returned to live with her mother who assisted her in raising her severely autistic daughter. Juliet also claimed for maintenance for her daughter from the estate due to her disability.

When Lauretta was marrying her partner Mark, her father strongly opposed the relationship leading to a falling out; as a result of which the Deceased became concerned that he would be physically assaulted upon attending his daughter’s wedding, so much so that he reported his soon to be son in law to the police and there was an officer on call to assist him during the ceremony should it be necessary. Her marriage did eventually fail, and her father supported her emotionally but not financially.

The Judge noted that over the years since his gift in 2008, there had been periods of estrangement between the claimants and the Deceased in which they married, divorced and purchased property all without relying on the father for financial support.

The Judgment

Juliet had requested funds from the estate to fund a lifestyle commensurate with her current standards, living in her mother’s large countryside property with a swimming pool, rather than the less luxurious lifestyle Juliet’s had chosen when living independently with her husband.

Juliet’s claim for financial assistance in relation to her severely autistic daughter was refused as her daughter was not an eligible claimant under the 1975 Act however the Court was willing to consider the limitation upon Juliet’s ability to work as a result of caring for her child. It was noted that the Deceased had left £30,000 legacy to each of his two granddaughters which had already been transferred during the administration of the estate.

Lauretta claimed that she required the funds from the estates to assist her with a property which she was only able to pay an interest only mortgage upon and would likely need to sell as she was unable to secure funds to purchase her husband’s share in the property during their ongoing divorce. The Court doubted that a lump sum payment could be properly described as maintenance within the 1975 Act because it would not help her in the future. When Lauretta purchased the flat, she did not do so in reliance on any assurance from her father that she would inherit a substantial sum after his death as when he gave the gift in 2008 he specifically said in the letter that she should expect no more money from him in the future. It was found that the lifestyle choices of Lauretta were made independently of any financial assistance from her father.

The Court found that the claimants had failed to demonstrate that the Deceased had an obligation or duty to maintain them. Further, the Judge stated that both claimants failed to demonstrate their need for maintenance. In particular, he did not consider they had demonstrated a need for maintenance which could not be dealt with by a change or adjustment to their lifestyle.

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