In the case Miles & Shearer v Shearer  EWHC 1000 (Ch) a claim was brought against the estate of Anthony Shearer ("the Deceased"), the former chief executive of the merchant bank Singer and Friedlander. The claimants were the Deceased's adult daughters from his first marriage: Juliet (40 years old) and Lauretta (39 years old). Neither of the claimants nor their children benefitted under the Deceased's Will. The claimants sought reasonable financial provision from their father's estate under the Inheritance (Provision for Family and Dependants) Act 1975 ("the 1975 Act"). The defendant was the Deceased's second wife, Pamela, who was the principal beneficiary of the estate.
This case demonstrates the difficulties that adult children seeking to bring a claim under the 1975 Act may have, particularly when they are able to meet their maintenance needs from resources other than the deceased's estate and where the deceased had no obligation or responsibility towards them. This is particularly the case where they have been well provided for during the parent's lifetime.
Claims under the 1975 Act
Where someone dies domiciled in England and Wales, certain categories of people can make an application for financial provision from the deceased person's estate on the basis that their Will, and/or the devolution of their estate under the intestacy rules, does not make reasonable financial provision for the applicant. Under s.1 (1) (c), a child of the deceased is an eligible claimant.
The court will apply a two-stage test: (1) has there been a failure to make reasonable financial provision for the applicant; and if so, (2) what order should be made. Under s.1 (2) (b), 'reasonable financial provision' for adult children is limited to what would be reasonable for their maintenance. There is no statutory definition of 'maintenance' but Lord Hughes at paragraph 14 of Ilott v The Blue Cross & Ors  UKSC 17 stated that maintenance, "… cannot extend to any or every thing which it would be desirable for the claimant to have. It must import provision to meet the everyday expenses of living."
Section 3 (1) sets out a number of factors that the court should consider when applying the two-stage test.
S3 (1) (a) and (b) of the 1975 Act - the financial resources and needs of the claimants
The judge was critical of the claimants' alleged financial needs. Juliet's financial needs had been calculated based on her current living standard, which involved her living in her mother's large countryside property with a swimming pool. Juliet's previous standard of living with her ex-husband in Ministry of Defence accommodation was far less luxurious and she had accepted that lifestyle. The judge concluded that her financial needs should be assessed on that lower standard of living.
Juliet had also sought costs relating to her youngest daughter who suffers from autism as part of her financial needs. Juliet's daughter is not an eligible claimant under the 1975 Act as a grandchild of the Deceased. While physical or mental disabilities of an applicant or beneficiary of an estate can be taken into account under s.3 (1) (f), this does not extend to any disability of the applicant's dependant. The judge did however take into account the impact of Juliet's caring responsibilities for her daughter when assessing her earning capacity.
Lauretta sought financial provision from the Deceased's estate to convert an existing interest only mortgage on her property to a repayment mortgage. The judge found that it was unlikely that the sum of £244,000, to enable the conversion of the mortgage to a repayment one with lower monthly repayments, would fall within the 'maintenance' requirement under the 1975 Act.
Lauretta also claimed a lump sum of £105,000 to buy out her ex-husband's 11% equity in the property, which she was due to pay in 2034. The court found that this obligation did not fall within Lauretta's financial needs that she 'has or is likely to have in the foreseeable future', which was the requirement under s.3 (1) (a).
The court found that neither claimant could evidence a need for maintenance that could not be met if adjustments were made to their lifestyles.
Section 3(1) (c) - the financial resources and financial needs of Pamela as a beneficiary of the estate
The judge had no information about Pamela's finances and therefore proceeded on the basis that she did not require provision from the Deceased's estate to meet her financial needs.
Section 3(1) (d) - any obligations and responsibilities which the Deceased had towards the claimants
The Deceased had no legal obligation to maintain the claimants after they reached 18 years old. To rely on s.3 (1) (d), the claimants needed to show that the Deceased had an obligation or responsibility for them at the time of his death. They failed to do so.
In 2008, the Deceased made a gift of £177,000 to Juliet and £185,000 to Lauretta, and made clear to them that he would not provide them with any further financial assistance. Neither claimant received financial support from the Deceased after the gifts in 2008, despite their requests. In the last decade of the Deceased's life, he went through periods of estrangement with both claimants and they made important lifestyle choices without an expectation of financial support from him.
The judge ultimately concluded that the claimants failed to establish that reasonable financial provision had not been provided for them. Therefore, their claims under the 1975 Act were dismissed.