Can you disinherit a child?
Instead Princess Margaret’s former husband split his estate between his three children from his two marriages, and a son, who was born out of wedlock.
The general rule in England and Wales is that, a testator, i.e. a person making a will, can leave what they chose to whomever they chose, which includes disinheriting a child. There are often valid reasons for doing so. However, a child of the deceased can bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (the ‘1975 Act’) if the will is not thought to provide reasonable financial provision for them.
Under the 1975 Act, a child of the deceased, including an adult child, or any person (not being a child of the deceased) who was treated by the deceased as a child of the family, is able to bring a claim (the ‘Applicant’). It is irrelevant whether the child was born out of wedlock and therefore Lord Snowdon’s first-born daughter would have the standing to bring a claim under the Act.
The court will apply the standard provision test for a child, this being “such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his/her maintenance”.
This differ slightly from a spouse or civil partner bringing a claim where the court will adopt a different test, namely “such financial provision as it would be reasonable in all the circumstances of the case to receive, whether or not that provision is required for his/her maintenance”.
When considering standard provision, the court will take into account a number of factors, including the financial resources and needs that the applicant – and any beneficiary of the estate of the deceased – has or is likely to have in the foreseeable future; the size and nature of the net estate; any physical or mental disability of any applicant; and any other matter which in the circumstances of the case the court may consider relevant.
The court therefore has a wide discretion although not all of the factors will be applicable in all cases. If it is held that reasonable financial provision has not been made, the next question to consider is what provision should be awarded. Again, the court has a wide discretion and will make the most appropriate order in the circumstances. This could be an order that periodical payments are made to the applicant out of the net estate, an order that a property in the estate be transferred to an applicant or, commonly, that a lump sum payment be made to the applicant out of the estate, which is often favoured by the parties in order to achieve a clean-break.
A 1975 Act claim needs to be brought within six months of the date of the grant. Such claims can be costly and it is important to consider the size of the estate at the outset. Furthermore, it is advisable to consider settling a claim by way of negotiations or mediation as opposed to allowing it to go all the way to trial where the costs can be extremely high and there will be risk and uncertainty.
Since the recent Supreme Court case of Illot v Mitson, it has become increasingly difficult for an adult child to bring a successful claim under the 1975 Act. The court emphasised the importance of limiting awards to “maintenance” and said this cannot extend to any and every thing desirable for the applicant to have. It must import provision to “meet the everyday expenses of living”.
Housing is one of the first considerations but the Supreme Court has confirmed that an “additional something” must be present to achieve a successful outcome. The deceased’s wishes will be taken into account as a factor under the 1975 Act. Therefore, the case has been heralded as a win for testamentary freedom, but with caveats.
It is advisable to leave a letter of wishes, a non-binding document left with a will to explain the reasons for disinheriting a child or leaving one child a lesser sum than another, although this is not a fool proof way of preventing a 1975 Act claim being brought.
Amy Wilford is associate in the dispute resolution team at Thomson Snell & Passmore LLP