What is Reasonable Financial Provision?
The Central London County Court has dismissed a claim by widow Ms Wooldridge for further financial provision under her late husband's estate.
Mr Wooldridge, a successful businessman, died in a helicopter crash in October 2010, leaving his multi-million pound estate, which was divided between Ms Wooldridge and his two children (one of whom was from a previous marriage). Under the Will, Ms Wooldridge received the matrimonial home, valued at approximately £4 million, and other assets worth £1.6 million. She was also granted £1.9 million in compensation for her husband’s death. The two children received shares in Mr Wooldridge's company and the benefit of a life insurance policy.
Inheritance Act Claim
In 2012, Ms Woolridge brought her claim under the Inheritance (Provision for Family and Dependants) Act 1975 ('the Act') that the Will did not make reasonable financial provision for her. Ms Wooldridge submitted that she needed a further £372,000 per year in order to meet her annual expenditure. Amongst other things, her schedule of assets and liabilities made provision for expenditure of £65,000 on holidays and £21,500 for evenings out. A further £79,000 for social events and £58,000 for transport per year was also claimed.
Ms Wooldridge's stepson, as defendant, stated that the claim was unrealistic and overestimated. He also submitted that, should the claim succeed, the business interests that Mr Wooldridge and his brother had built in their construction company would be significantly damaged. Mr Wooldridge, he submitted, had clearly intended to leave these interests for the benefit of both his sons.
The Judgment
The Court rejected Ms Wooldridge's claim. The Court gave particular attention to what would be deemed as 'reasonable' financial provision and concluded that Ms Wooldridge had been sufficiently provided for under the Will. The Court found that there was no evidence to support Ms Wooldridge's purported expenditure, finding that it appeared to be more of a 'wish list' than a real assessment of her needs.
Furthermore, and perhaps more interestingly, the Court held that taking further resources from the business assets would adversely affect the children's interests. The Court found that the children's lives were 'tied up with the family business and to destroy these family businesses cannot be justified'.
This case highlights the point that what the Court considers to be reasonable financial provision, even at the elevated level assigned to spouses and civil partners, will always be balanced by factors such as the current and future financial needs of the other beneficiaries and in this case, the fact that Ms Wooldridge had already received significant provision under the Will was a very significant factor which counted against her claim.