The Inheritance Act 1975 – Contesting Wills and Non-Contestation Clauses

Background

Dr Sim, a former GP, lived a ‘complicated life’ as Judge Hodge KC described. His Will provided primarily for his children and grandchildren from his three marriages and one extra-marital relationship. His Will was executed on 19 December 2017 where he was in the last stages of his life. He died shortly after aged 79, his Will contained the following provisions:

1. Mrs Sim to execute a Deed of Release of all rights she may have against Dr Sim’s Estate under the 1975 Inheritance Act and any interest she had in relation to any asset owned by Dr Sim.
2. Mrs Sim to vacate the matrimonial home upon Dr Sim’s death, and provided she releases her right to claim, Mrs Sim would receive £250,000 absolutely, £125,000 on the condition that Mrs Sim had done all that was required of her to release her joint interest in the couples Dubai property, a lifetime interest in the Residuary Estate with the income being appointed to her.

At the time of Dr Sim’s death, his current marriage was problematic, and he was intertwined in divorce proceedings. Mrs Sim had sought non-molestation and occupation orders against the Doctor. Mrs Sim also made criminal accusations of sexual violence and domestic abuse which gave reason to their marital breakdown.

What is a non-contestation clause?

Dr Sim’s Will attempted to prevent his wife from benefitting unless she agreed to forfeit her right to bring a claim under the 1975 Inheritance Act. This is a textbook example of a non-contestation/forfeiture clause. These clauses often make the provision that a beneficiary will lose their entitlement under the Will if they decide to contest the Will under the 1975 Inheritance Act.

These clauses are designed to deter beneficiaries from disputing the Will and potentially halting distribution from the deceased’s estate.

The Inheritance (Provision for Family and Dependants) Act 1975

Under this Act, the Court possesses the power to vary the terms or distributions from the deceased’s estate where it is found that the Will fails to make reasonable financial provision for a dependant of the deceased. The Court is only able to extend this power to specific family members and dependants that qualify under the Act. It must specifically be found that the Will does not provide reasonable financial provision. The standard for what counts as reasonable financial provision is greatly contested but is generally agreed to be enough to maintain the dependent’s lifestyle.

In considering the case, Judge Hodge KC identified that that the questions to consider in Mrs Sim’s claim were:

• Did the Will make reasonable financial provision for Mrs Sim;
• and if not, what reasonable financial provision ought now to be made?

The Court considered the factors listed in section 3 of the Act, such as the financial needs and resources of the claimant, the size and nature of the estate of the deceased, and any other matters.

Where a spouse brings such a claim, the Court also considers the age of the claimant, the length of the marriage/civil partnership, any contributions made to the welfare of the family of the deceased and lastly, the provision the claimant reasonably expected to receive if, on the day the deceased died, the marriage were terminated by divorce rather than death.

Judgment 

The Court found that it would be wrong in principle to allow for a claimant to bring a 1975 Act claim knowing that in doing so, the beneficiary would forego receiving a certain benefit and then say that because they have given up their benefit under the Will, the Will had failed to make reasonable financial provision.

Essentially, Dr Sim’s Will was deemed reasonable in including this non-contestation clause aimed at discouraging Inheritance Act 1975 claims. Mrs Sim was already due to benefit from the Will and was viewed as unreasonable in choosing to give up her gifts by ignoring this non-contestation clause, in favour of claiming that Dr Sim’s will failed to provide for her.

The only part of the Will that the Court found to be unreasonable was the failure to include a provision allowing Mrs Sim, if she refused to fulfil the condition relating to the Dubai property, to use part of the capital to purchase a home for herself. This would in effect leave her homeless as the matrimonial home would need to be sold to fund future legacies under the Will.

For this reason, Judge Hodge KC varied the trusts allowing for a capital sum to be reserved for Mrs Sim providing her with a property which she could live in rent-free as a life tenant.

Comments

This case has been very helpful in confirming the enforceability of non-contestation clauses within Wills. Such clauses prove useful to a testator looking to prevent potential claims from eating away at the estate via the Inheritance Act 1975 or otherwise. The only caveat to this is that the clauses must not be so stringent and unreasonable to give rise to a claim under the Inheritance Act 1975, which would lead to a result that the testator initially wanted to avoid.

Furthermore, the case has provided useful insight into setting out the approach the Court takes to claims. It is important to note that the Court advises prospective claimants to ensure that they have strength tested their cases prior to bringing their claim. Judge Hodge KC commented on this and Mrs Sim’s behaviour, finding that if Mrs Sim had more carefully considered her evidence and the merits of her claim, the outcome may have been different. Also had she approached the claim with a more reasonable perspective perhaps she would not have rejected the Part 36 offers she was given, an action for which she was penalised at a subsequent costs hearing.