The recent court victory of budding young opera singer Miles Taylor provides a salient reminder that the notion that your will can leave whatever you want to whomever you want is, in some ways, a myth says Jessica Bermingham
Mr Taylor, son of millionaire businessman Peter Gardiner, has won a battle to obtain financial support from his late father from beyond the grave in a case before the Leeds County Court. When Mr Gardiner passed away in 2006 he left nothing behind for his seventeen-year-old son, and in fact specifically excluded him from benefit. His ’2 million estate was instead divided between his two other sons and a number of charities.
Not to be deterred by his late father’s express wishes, in 2008 Mr Taylor made an application for financial provision from his father’s estate under the Inheritance Act, which was ultimately settled out of court and enshrined in a ‘consent order’. It was agreed that the executors of Mr Gardiner’s estate would set aside ’210,000 in order to support Mr Taylor through sixth form and higher education by a series of periodic payments which would come to an end in August 2014.
Fast forward some seven years to August 2014, and Mr Taylor found himself still at university, due to finish in the summer of 2015, and hoping to realise his singing ambitions by pursuing a postgraduate course at one of the leading music schools in London.
The executors’ hands were tied though, and due to the strict terms of the consent order, they were unable to provide further financial support to Mr Taylor to pay for any more of his education.
Eager to continue his musical dreams, Mr Taylor applied to court to vary the consent order. Despite strong protestations from the executors, the judge decided that he had complete and unlimited discretion over whether the previous order could be varied, and was entitled to take into account any change in circumstances since the time of the original order.
A total of ’21,500 was awarded to Mr Taylor, which it was anticipated would go towards his further course fees, singing lessons and rental costs, with part of the payment being conditional upon Mr Taylor obtaining a place at music school.
The Inheritance Act provisions certainly prove a flexible and frequently used means for disinherited or ‘cut out’ beneficiaries to obtain financial provision from an estate, and this case serves as a warning to those who are thinking about making a will.
Where someone has been omitted from a will, where the intestacy provisions (ie where there is no will) do not provide for them or where some, but perhaps not enough, provision has been made, it is in many cases open to those disappointed people to make a claim for financial support from an estate. Only certain people may apply, but the scope is wide; including spouses, former spouses, cohabitee, children and the rather more nebulous ‘dependants’ within those people able to make a claim.
The critical test is whether or not the testamentary arrangements of the deceased have made ‘reasonable provision’ for the applicant. Usually whether or not the provision made is ‘reasonable’ depends on what is required for the applicant’s maintenance. As Mr Taylor’s case demonstrates it is not just a case of provision to meet strict needs such as food and housing, but can take into account a much wider range of requirements.
In the case of an application by a spouse, the question is simply whether or not the deceased has made reasonable provision for that person, widening the scope of a potential award even more.
In England and Wales, unlike many countries on the Continent, there is no legal obligation to leave a specified portion of your estate to certain family members. However, the importance of the Inheritance Act as a mechanism for disappointed individuals to ultimately vary the testamentary provisions after death should not be underestimated.
The court can make sizeable awards following an Inheritance Act application and may well carve up the estate in surprising and unexpected ways. Applications are often hotly contested by other beneficiaries who may be facing a potential reduction in their portion of the estate and are therefore desperate to preserve the status quo.
In the context of estate planning, it is important when writing a will to take into account any individuals who may be expecting something from the estate; to be aware of the risks of those types of claims; and to consider trying to minimise that risk. Failure to do so may result in lengthy and costly legal battles among your loved ones after your death.
Jessica Bermingham is an associate in the commercial group at Thomson Snell and Passmore