The Inheritance and Trustees’ Powers Act 2014 Changes to the Inheritance Act 1975
The Inheritance and Trustees’ Powers Act 2014 came into force on 1 October 2014, making changes to the law on the distribution of an estate.
Schedule 2 of the Act contains changes to the Inheritance (Provision for Family and Dependants) Act 1975. The major changes are as follows:
1. The definition of a child (in relation to who can make a claim) has always included someone treated as a child of the family (i.e. a stepchild), but only where the deceased was married. That excluded those who lived with unmarried ‘parents’ (where the deceased was not the biological parent). This has now been changed. The definition includes anyone treated as a child of the family including “any family in which the deceased at any time stood in the role of a parent…”
2. Another class of person who can make a claim under the Act is those who have been maintained by the deceased. The definition of maintenance has been tightened and now includes the following wording: “a person is to be treated as being maintained by the deceased (either wholly or partly, as the case may be) only if the deceased was making a substantial contribution in money or money’s worth towards the reasonable needs of that person, other than a contribution made for full valuable consideration pursuant to an arrangement of a commercial nature.”
3. In addition, the court is now expected to consider “the extent of the contribution made by way of maintenance” – in other words, not just whether the deceased considered that he should maintain someone, but whether this actually happened and if so, to what degree.
4. In respect of spouses or former spouses who make a claim under the Act, the court will consider what may have happened had the relationship ended in divorce rather than death – which has lead to the ‘divorce fiction’ – the suggestion that when dealing with a spouse or former spouse, the level of provision should be expected to be approximately half of the net estate. The new Act adds a qualification – that “nothing requires the court to treat such provision as setting an upper or lower limit on the provision which may be made“. This is likely to lead to more arguments over the provision which should be made for spouses – particularly those who have been in especially long or especially short marriages.
5. There are two major changes to the law on time limits. Previously, you could not take a claim under the Inheritance Act until such time as a Grant of Probate had been issued. Now you can. This will doubtless be welcome news to some – particularly where interim maintenance is required and the executors delay in getting a Grant in order to defeat the claim. However, there is a risk that the wrong people may be named as Defendants – for example if one or more of the executors renounces, or if there is an intestacy and a number of people have an equal right to take out the Grant.
6. In the case of joint property, the 1975 Act did not allow anyone to bring a claim out of time to have that property returned to the estate. If you missed the 6 month deadline, that was it – even if you managed to get permission to proceed out of time on the main claim. That additional deadline under s9 has now been removed. The value of the share of the joint property is to be calculated according to what it would have been worth if the share had been severed just before death.
The Act has been criticised for not having made any significant changes to the law for cohabitants in the case of intestacy – they still do not inherit automatically and would instead have to bring a claim under the Inheritance Act. However, the changes made to the Inheritance Act listed above are, in my view, sensible and will remove some of the practical problems which applicants have experienced.
For advice on bringing or defending any claim under the Inheritance Act, contact our contentious probate team.