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Practitioners are reminded of the need to ensure clients who make a will understand the need to keep their will under review – and are aware of the implications of failing to reasonably provide for a dependent.
A recent case also demonstrates that the court is prepared to exercise its wide discretion to release funds from an asset to which a claimant is not automatically entitled, if that’s necessary to make reasonable financial provision.
The judge in Beg v Beg1 can be commended for the fairness with which he exercised his judicial discretion, in the specific circumstances, to ensure a widow had enough funds to provide her and her child the prospect of a home, notwithstanding the fact she had no automatic right to the funds.
What’s the background?
The deceased died in 2019 and his wife, Amina, was appointing executrix and sole beneficiary of his modest estate under his 2010 will, which had been drafted by solicitors. The estate included a residential property which was occupied by a tenant and was subject to a mortgage under which nearly £78,000 remained outstanding. Amina, who has a two-year-old daughter, received income only from the rent from the property and from state benefits.
However, there was another property - the family home. This property had previously been owned outright by the deceased’s mother, until her death in 2009 when the property was then transferred into the joint names of her three beneficiaries - the deceased and two brothers. Then in 2010, the house was transferred into the joint names of the deceased and one of the brothers, Arif, on trust for themselves as beneficial joint tenants.
Amina brought a claim under the Inheritance (Provision for Family and Dependants) Act 1975 seeking reasonable financial provision and asked the court for a declaration as to the beneficial ownership of the family property.
The court gave careful consideration to the evidence, particularly the nature of the 2009 and the 2010 transfers of the family home to the brothers, finding no indication of any positive evidence of an intention that the property should be held as tenants in common. On the face of it, the declaration of trust in the transfer form was conclusive that the two brothers intended to hold the property as beneficial joint tenants and not tenants in common. Therefore, the deceased’s half share passed automatically to Arif under the right of survivorship.
Reasonable provision
However, the operation of the right of survivorship was – as the judge stated - subject to any court order made under the 1975 Act. If Arif was now solely entitled to the property, Amina and her young daughter would effectively be left without a home of their own, and unable to discharge the mortgage on the rented property to enable them to live there.
The judge said the most obvious and primary claim on the estate was to provide for Amina and her daughter, particularly ensuring they had a home to live in. The will did not make reasonable provision for that need.
The court decided to exercise its discretion and made an order directing that the deceased’s beneficial interest in the family home be brought into the net estate – to the amount necessary to realise £80,000.
This was sufficient to discharge the mortgage over the tenanted property; and it would mean Amina and her daughter could make it their home once the tenancy ended.
