After more than three decades of marriage to a very wealthy and generous man, his widow was expecting to be well-provided for after his death. But you can imagine how her grief was compounded when she learned that her inheritance would be little more than an interest in income in just £200,000 and she might not be able to remain in her home.
Understandably distressed, she contacted Ingram Winter Green for legal advice about whether this could possibly be right or fair?
Fortunately, Divyesh Popat, the partner in our litigation team who advised the widow, successfully persuaded the executors to increase the financial provision to £1.4 million and secured the guaranteed right to remain in her home for the rest of her life.
‘My view was that a claim under the Inheritance (Provision for Family and Dependants) Act 1975 could be made, providing we could establish the true extent of her husband’s wealth and that the provision made was unreasonable.’
As with any Inheritance Act claim, Divyesh began by asking the executors of her late husband’s estate exactly how much money and property he had left behind. The answer was £500,000 as everything else had been given away during his lifetime, mainly to his son from a former marriage.
This set alarm bells ringing as, according to our client, her husband had at one time been worth significantly more. Further investigations were carried out which revealed that, since their marriage, assets (including their home) belonging to the late husband had been transferred into two trusts over which the son and a lawyer had complete control.
‘Now for many people, that would spell disaster’, explains Divyesh, ‘because once assets have been placed in a trust they are no longer treated as belonging to the person who put them there and cannot usually be disturbed in order to settle any sort of third party financial claim, including a claim for enhanced inheritance provision.’
However, Divyesh challenged the nature and intended effect of the trusts, on the basis of the type of arrangement that had been created. He argued that the trusts fell into the category of a ‘nuptial settlement’ which could be varied by the court.
In simple terms, a nuptial settlement will be found to exist where a trust has been set up during a marriage, or in contemplation of a marriage, with the intention of benefiting a party to the union (i.e. husband, wife or civil partner) or a child of one of those involved.
Where a marriage breaks down, it is possible for the court to step in and change the terms of the trust so that adequate provision for the divorcing parties can be made from the trust assets. We argued that, by analogy, it should also be possible for the court to step in and order a variation when one spouse dies.
‘We took a firm line in this case’, says Divyesh ‘because our client had not been treated fairly and her inheritance was not adequate. The argument we were proposing to run was unusual but, in our view, highly likely to succeed. With this in mind, we issued court proceedings confidently and bargained hard when the executors came to us to negotiate an amicable out of court settlement.’
Securing her home and an increase of £1.2 million was a much fairer result for our client, made all the better by the fact that we were also able to obtain reimbursement of our client’s legal costs and put in place security to guarantee that she would receive the monies that had been pledged.
Seeking professional advice at an early stage undoubtedly contributed to the satisfactory conclusion of this case, but it was Divyesh’s expert knowledge about inheritance disputes and contentious probate matters generally that made all the difference and which highlights the importance of talking to a specialist.
If you need help to resolve an inheritance dispute, why not give Divyesh a call on 020 7845 7412 or email at divyeshpopat@iwg.co.uk to see if he can assist.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.