Such claims can be a lifeline for claimants, but conversely a concern for those drafting Wills, and for the beneficiaries of an estate, who wish to protect their inheritance.
The Inheritance Act allows eligible individuals, who can demonstrate that they have not been adequately provided for under a Will, or lack of a Will, to claim a share of the deceased's estate.
The Deceased's adult daughter brought a successful claim under the Inheritance Act, seeking provision from her father's estate. She entered into a Conditional Fee Agreement (CFA) to fund the proceedings. A CFA is a 'no win, no fee' agreement, allowing a claimant to pursue a claim that they could not otherwise fund. They often include a success fee which the claimant pays to their solicitor if their claim is successful, in addition to their base legal costs.
As part of the claimant's award, the court ordered that part of her CFA success fee was paid from the estate, deeming it to be an element of her financial needs. The Deceased's widow unsuccessfully appealed this decision in the Court of Appeal. However, the Supreme Court allowed her appeal, ruling that success fees cannot be included in an award under the Inheritance Act.
It is particularly likely that Inheritance Act claimants may obtain a CFA (or other funding arrangement), since financial need forms a key basis of their claim.
These people are automatically eligible:
An Inheritance Act claim must be issued within six months from the Grant of Probate unless the Court give permission to issue after this, so legal advice should be sought as soon as possible.
There are several factors the Court must consider:
The Court is limited to ordering 'reasonable financial provision' to the claimant. There is no specific percentage of the estate to be awarded, rather it will be based upon the facts of each case, so sums will vary significantly. The Court also has discretion regarding the form of financial provision awarded, such as a lump sum or periodic payments.
The Hirachand judgment shone a light on the difficulties that claimants often face in their up-front funding of these claims. However, its relevance is for claims brought under CFAs. Claims which are not funded this way are unaffected by Hirachand.
If you are concerned about a potential Inheritance Act claim against your estate, or need to bring a claim, our experienced team can provide expert advice. Please contact Fiona Lawrence on 0117 314 5389 who will be happy to support you.
*The Inheritance (Provision for Family and Dependants) Act 1975