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The Inheritance and Trustees' Powers Act 2014 (“the ITPA 2014”) received Royal Assent on 14 May 2014 and is expected to come into force on 1 October 2014.
The ITPA 2014 will make several significant changes to the 1975 Act (as well as the Administration of Estates Act 1925 and the Trustee Act 1925).
This legal update focuses upon the changes to the 1975 Act; the full changes are contained in the second schedule to the ITPA 2014.
Currently, under section 1(1)(d) of the 1975 Act there is provision for “any person (not being a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage” to bring a claim for provision under the 1975 Act.
In short, this allowed “step-children” to bring a claim against a deceased step-parent’s estate should they not have received reasonable financial provision for their maintenance from the estate.
A prerequisite therefore was that the deceased step-parent was married to the potential claimant’s mother or father.
The ITPA 2014 changes this position and removes the requirement for there to have been a marriage between the deceased step-parent and the potential claimant’s mother or father (recognising the increasing number of families with parental figures who may be cohabiting but not married).
The ITPA 2014 also specifically extends the clause to include children treated as a child of a civil partnership.
The ITPA 2014 also clarifies that “family” includes a family of which the deceased was the only member (apart from the claimant) and so it is expected that going forward those who have enjoyed a relationship with the deceased akin to that of parent and child will be eligible to bring a claim (should they not have received sufficient provision from the estate).
The position of those being maintained by the deceased has been amended so that the claimant no longer needs to show that the deceased contributed more to the relationship than the claimant did (opening claims for those who may have been mutually dependant on the deceased).
It also clearly spells out that those receiving maintenance for “full valuable consideration pursuant to an arrangement of a commercial nature” (such as carers and lodgers) will not be permitted to bring a claim under the 1975 Act.
Currently, a claim under the 1975 Act cannot be brought until a Grant of Representation has been issued. The ITPA 2014 will permit claims to be brought before the Grant.
This will be of great assistance in cases where executors/administrators are ‘dragging their heels’ in applying for a Grant or indeed in such cases where it is not necessary for a Grant to be obtained (as can be the case where all assets pass by survivorship or in low value estates).
The Court will be given wider powers so that it can vary (for the claimant’s benefit) the trusts on which the deceased’s estate is held (whether arising under the will, or the law relating to intestacy, or both).
The Court will also have extended powers to make Orders in relation to jointly owned property.
Currently, the position under the 1975 Act is that where there is property in an estate which is jointly owned so that it passes by survivorship to the surviving joint owner (and so not through the deceased’s will or the intestacy rules) this is only able to be ‘clawed backed’ in to the estate for possible redistribution to claimants if a claim is brought within 6 months from the date of the Grant of Representation.
However, this 6 month time limit is removed by the ITPA 2014 and the Court will be able to treat the deceased's share of such jointly owned property as part of the deceased's net estate to such an extent as the court considers to be just in all of the circumstances of the case.
This new clause will bring uncertainty to the surviving joint owners of assets who previously benefited from the 6 month time limit, however only time will tell how the Court’s will exercise this extended power and the Court must be satisfied that it is just for jointly owned assets to be available for distribution to claimants.
It is likely that the more time that has passed, the harder it will be to justify as ‘just’, particularly if the surviving joint owner has not had notice of a potential claim and has changed their position on the basis on the assets passing solely to them.
This article was written by John Sykes.
For more information contact John on +44 (0)20 7203 5358 or email@example.com