You are here: Home - Retirement - Retirement planning - News -

Can you disinherit a child?

0
Written by: Amy Wilford
07/11/2017
After the death of Lord Snowdon earlier this year, it was revealed he had left his first-born illegitimate daughter out of his £3.2m estate. Here are the legal implications.

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 

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week