Married couples - individual wills need a joint approach
On 12 February 2016, the Central London County Court dismissed a claim brought under the Inheritance (Provision for Family and Dependants) Act 1975 (“the 1975 Act”) for further financial provision to be awarded to a widow out of a deceased’s estate. The claim was brought by Thandi Wooldridge, whose husband died in 2010.
It is thought that this is the first time that such a claim by a widow has been dismissed without any further financial provision being awarded.
Mr Wooldridge was a successful businessman in the construction industry when he died in a helicopter crash in October 2010. His estate at the time of his death consisted of a home in Surrey worth approximately £4.25million (by August 2015) and the benefit of several life insurance policies, worth in the region of £1.6million. His widow, Thandi Wooldridge also received compensation of approximately £1.9million over Mr Wooldridge’s death.
Mr Wooldridge’s homemade will left Mrs Wooldridge the matrimonial home and benefit of the life insurance policies, but divided his business interests and a further life insurance policy between his two sons, Charlie (aged 22 at the time of death) and Rhett (aged 6 at the time of death).
On 20 August 2012, Mrs Wooldridge began a claim under the 1975 Act for further financial provision from the estate of a little over £372,000 per year, claiming that her existing assets and entitlement under the will were not sufficient to meet the standard of living to which she had become accustomed.
The budget which she provided to the Court for her anticipated expenditure included a claim for £65,000 for holidays and £21,500 for “going out (meals, theatre, polo events etc.)”. She further claimed that she needed £79,000 for social events, clothes, jewellery, personal care and general entertainment as well as £58,000 to cover transport costs, including the upkeep of a Bentley and Range Rover. The cost of purchasing the Bentley for £155,000 was also listed as an anticipated expense.
The claim was defended by Charlie on the basis that his step-mother’s budget was unrealistic and did not match what she was actually spending. Further, that the request would undermine the commercial interests which Mr Wooldridge had built up and which had been left for the benefit of his sons.
Judge Karen Walden-Smith dismissed the claim on the basis that Mrs Wooldridge had had enough from the estate and had “not established that the will failed to provide her with sufficient financial provision to meet her needs”.
The Judge noted that the budget was more like a “wish list” rather than an accurate assessment of her needs, including the purchase of a Bentley and speculative business ventures. The assets which had been left for Mrs Wooldridge were not being invested properly to provide an income for the future and any increase in provision for Mrs Wooldridge was likely to mean that the profitability of Mr Wooldridge’s company would be significantly reduced, therefore having a direct impact on the interests of Charlie and Rhett.
When making a claim under the 1975 Act, applications for reasonable financial provision means “such financial provision as it would be reasonable in all the circumstances of the case, whether or not that provision is required for his or her maintenance.”
Historically, the difference between reasonable financial provision and maintenance has caused the Court a great deal of difficulty. The Court will apply an objective test as to whether the provision made by the deceased party was reasonable. This case is particularly interesting because, generally, it is expected that when a spouse makes an application for financial provision under the 1975 Act there is likely to be an award.
The Courts often conduct a divorce cross-check when a spouse makes a claim under the 1975 Act, meaning that they will have regard to the provision which the applicant might reasonably have expected to receive if the parties had divorced rather than one of the parties had died. The Court will not place an upper or lower limit on the financial provision made under the Act but again there is often an expectation that a surviving spouse might receive around 50% of the estate in a 1975 Act claim.
However, this case highlights that every claim under the 1975 Act, including those by surviving spouses, will be decided on the facts and circumstances of the case in question. In particular, the starting point ought to always be the factors set out at Section 3 of the 1975 Act, with particular focus on the financial needs and resources of the applicant and the other relevant beneficiaries, balanced against the size and nature of the estate.
We will have to await further decisions relating to claims for an increase in reasonable financial provision, however this most recent judgment does illustrate that the Court will not simply “sign off” on an application for more money simply because the spouse suggests that they need it.
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