NOTE: This article was published in July 2012 and reflects the law as it stands on the date of publication and not at any later date.

Adult children

 There has been some uncertainty as to the requirements for a successful claim by an adult child. The classic position was that such claims were not likely to succeed in the absence of a moral obligation or “special circumstances”.

It was not enough to establish: (a) the mere fact of blood relationship and (b) necessitous circumstances (Re Coventry [1980] Ch 461). If those were the only two elements established, it was thought that the claim would fail. This was because no obligation is generally owed by a parent to an adult child (unless the child is disabled and/or there has been a continuing assumption of responsibility by the parent to the child and/or promises made by the parent which have been relied upon by the child). In layman’s terms, an adult child is expected to maintain himself.

However, there has been something of a retreat from the absolute position that an applicant must do more than establish necessity and relationship.

Firstly, it has been said that there is no special bar to claims by adult children. As Browne-Wilkinson J said in Re Dennis [1981] 2 All ER 140, at 145B:

 The court now approaches claims made by a son on the same basis as claims made by any other applicant, though in the past it might be said that the court viewed such claims with some disfavour.

Secondly, the right approach is for the Court to apply the factors in s. 3 of the 1975 Act, rather than to ask whether the Claimant has only established necessity and relationship, or whether there are “special circumstances” or a “moral obligation” (terms which do not appear in s. 3). The Court should not put a “gloss” on the words in the 1975 Act.

Thirdly, the objection to claims by adult children, however needy, may only apply where the child has earning capacity. In Re Hancock [1998] 2 FLR 346 Butler-Sloss L.J. said (at 351F-G):

It is clear to me that the 1975 Act does not require, in an application under s. 1(1)(c), that an adult child (whether son or daughter) has in all cases to show moral obligation or other special circumstance. But on facts similar to those in Re Coventry and even more so with the comparatively affluent applicant in Re Jennings, if the facts disclose that the adult is in employment, with an earning capacity for the foreseeable future, it is unlikely that he will succeed in his application without some special circumstance such as a moral obligation.

 

In the Court of Appeal in Espinosa v Bourke [1999] 1 FLR 747 it was said that an applicant, with a job or capable of obtaining a job, would have to identify a very weighty factor to establish that there has been a failure to make a reasonable decision, typically some obligation owed by the deceased. Without such a weighty factor, there will usually only be two factors in support of the claim, i.e. that: (a) the applicant is the child of the deceased; and (b) the applicant is in need.

However, the true position is that an adult child may be able to bring a successful claim even if he or she is able to work.

 

In Ilott v Mitson [2011] WTLR 779 the testatrix left her entire estate of £486,000 to certain animal welfare charities, to whom she had no particular attachment. She left nothing to her only child, a daughter aged 50. The daughter was estranged from her mother. She had left home at 17 to live with a man, of whom the mother disapproved. When she married she did not even ask her mother to attend her wedding. Despite three attempts at reconciliation, the daughter had lived entirely independently of her mother for 26 years. She never expected to receive anything from her mother. The reason for the estrangement between mother and daughter seems to have been that the testatrix disapproved of her daughter’s choice of partner.

 

The daughter was in financial need. She had five children. She lived almost entirely off benefits and tax credits. She did not work, or only did so sporadically, although she was not physically or mentally incapable of working.

 

The daughter succeeded at first instance. The District Judge analysed the reasons fior the estrangement. He found that the deceased had acted unreasonably in bearing a grudge over her daughter’s choice of partner. He awarded the daughter £50,000 (capitalising her maintenance need of £3,000 per annum).

 

The charities appealed to the High Court contending that the daughter had not overcome the initial hurdle of establishing that it was unreasonable that the Will did not make reasonable provision for her maintenance. The appeal succeeded. Eleanor King J concluded that the District Judge had asked the wrong question. He had concentrated too much on the unreasonableness of the testatrix’s reasons in excluding her only daughter. However, the question was not whether the deceased had acted unreasonably but whether, on an objective basis, the resulting provision, or lack of it, was unreasonable.

 

Looked at objectively, it was not an unreasonable result that the testatrix should not provide maintenance for a daughter of 46, who suffered from no physical or mental incapacity, and who had chosen to live entirely independently from her mother from the age of 17. On analysis, the claim amounted to no more than that the applicant was moderately impecunious, and was the child of the testatrix. This did not make it unreasonable for the testatrix to have left nothing to her daughter. The court should not interfere with the testatrix’s freedom of testamentary disposition.

 

The Court of Appeal overturned Eleanor King J’s judgment. Largely, this was because Eleanor King J was herself acting as an appeal judge from the District Judge. The DJ’s decision should not have been overturned unless it was “plainly wrong”. He was exercising a “value judgment” in determining that it was unreasonable for the testatrix to have made no provision for the applicant (paras. 25, 27, and 52-54). Such a value judgment should not be disturbed lightly, just because another Judge would reach a different judgment.

 

The District Judge had applied the right test. He asked himself whether all of the factors in the case (and not just the daughter’s financial need) produced an unreasonable result. He had made three value judgments which were not plainly wrong:

 

(1)  The daughter was entitled to make her life with a partner of her choice and to have a family of her own.

 

(2)  It was reasonable for the daughter to wish to remain at home for the time being to look after her children, and not to work.

 

(3)  The daughter and her husband were not to be blamed for their lack of income, and for living off state benefits.

 

The Court of Appeal recognized that, even if the adult child has some earning capacity, there may be other factors to take into account pointing in favour of an award, such as:

 

(a)  the size and nature of the estate;

 

(b)  the financial circumstances of other beneficiaries, and the extent to which obligations owed to those beneficiaries; and

 

(c)  the reasonableness of the testator’s reasons in deciding to exclude the applicant from benefit (see Ilott v Mitson [2011] EWCA Civ 346, at para. [91]).

 

In essence, the Court of Appeal was not prepared, on an appeal, to hold that the value judgment of the District Judge was plainly wrong in holding that it was unreasonable to make no provision for the daughter when:

 

(a)  The estate had been left to charities, to whom the testatrix owed no obligations;

 

(b)  There was £460,000 in the estate (which was more than enough to provide a modest sum for the daughter’s maintenance, and leave sufficient for the charities); and

 

(c)  It was objectively unreasonable to penalise the daughter for marrying someone of her own choice, and for having children and consequently being unable to work.

It does not follow that adult children will now have strong claims for reasonable financial provision.

Firstly, as the Court of Appeal accepted, if the District Judge had dismissed the claim at first instance, no appeal court could interfere.

Secondly, the result might have been different if:

(a)   The estate had been left to another child, or spouse, to whom significant obligations were owed;

 

(b)  There was not enough in the estate to provide for the spouse/child, and also to maintain the applicant child; and/or

 

(c)  There were no significant impediments to the adult child earning a living; and/or

 

(d)  As a matter of value judgment, the testator’s reasons for excluding the applicant child were not unreasonable.

Ilott v Mitson should be contrasted with that in Garland v Morris [2007] WTLR 797 (another case of estrangement between parent and adult child). The applicant had her own house, which was in a poor state of repair. She lived off state benefits. She did not work, as she had two young children. The major beneficiary under the Will was the applicant’s sister, who had a much closer relationship with the deceased. He had assumed responsibility to maintain that sister and her family (who were by no means well off), and had even encouraged her children to undertake university education on the basis that he would pay for it. There was not sufficient in the estate to achieve this aim and to pay maintenance to the applicant.

The deceased had not cut off the applicant because of a grudge, or because he disapproved of her choice of partner. The applicant had left home, and chosen to have nothing to do with her father for many years. She had also received the whole of her mother’s estate, to the exclusion of her sister.

In Hope v Knight [2010] EWHC 3443 (Ch) the court declined to make an award in favour of a 28-year old daughter, a care worker, whose earning capacity, together with other resources, barely covered her needs. The deceased left the whole of his estate to his long-term partner.  The court held that, although the deceased could have been more generous to his daughter, her claims did not outweigh those of his partner.

 

Spouses

 

There have been two approaches to a claim by a spouse which can be in conflict.

 

On one approach paramount importance is given to the provision that the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce (s. 3(2) of the 1975 Act). On this basis the logical starting point is an appraisal of the claimant’s notional entitlement on a divorce (Moody v Stevenson [1992] Ch 486).

 

In White v White [2001] 1 AC 596 (a divorce case) Lord Nicholls expressed the view that there was no presumption of equal division. However, a judge would always be well advised to check his tentative views against the yardstick of equality of division. As a general guide, equality should be departed from only if, and to the extent that, there is good reason for doing so. In a claim for ancillary relief a spouse’s claim is not limited to his or her financial needs. Therefore, unless there is reason to depart from the principle of equality, the assets of both spouses will normally be divided in equal shares.

 

This approach has been applied in the context of a claim under the 1975 Act. In Adams v Lewis [2001] WTLR 493 His Honour Judge Behrens awarded a wife approximately one half of the net estate of her late husband (the wife’s own assets were worth little). An approach based more on the needs and resources of the applicant was rejected, in part because s. 1(2)(a) of the 1975 Act provides that reasonable financial provision, in the case of a claim by a spouse, means such financial provision as it would be reasonable in all the circumstances of the case for a husband or wife to receive, whether or not that provision is required for his or her maintenance.

 

A contrasting approach (at least as far as emphasis is concerned) is to place lesser importance on the provision that might be awarded on a divorce, treating it as merely one factor to be taken into account amongst other factors, in particular the needs and resources of the applicant (see s. 3(1)(a) of the 1975 Act). In Re Krubert [1997] Ch 97 the Court of Appeal preferred this approach, pointing out that on a divorce there are two parties to be provided for, whereas on an application under the 1975 Act there is only one (104 C-D). Reasonable financial provision was to be assessed by reference to the surviving spouse’s needs, i.e. the provision of a home and sufficient income and capital to provide for reasonable needs (106F).

 

It is now clear that this is the correct approach.

 

Award of more than 50%

 

The applicant spouse may be awarded more than one half of the joint assets. In McNulty v McNulty [2002] WTLR 737 the applicant wife was awarded a lump sum of £175,000 on the basis that such a capital sum was sufficient to provide the wife with an income and to meet reasonably foreseeable contingencies. The award of £175,000 was in excess of the value of one half of the joint assets (£105,000). The Judge defended this discrepancy on the following basis:

 

… the great difference between the position on divorce and the position on death is that after a divorce both parties to the marriage have to be provided for, whereas on a death there is only one surviving spouse. So under the 1975 Act it will often be appropriate to award a higher sum than the applicant would have obtained on a notional divorce.

 

In P v G [2006] 1 FLR 431 Black J also down-played the importance of the provision which a spouse would expect to be awarded on divorce. He did not think it helpful to go further with the divorce fiction than was necessary to provide a cross check. The 1975 Act did not contemplate that an entire fictional ancillary relief case would be played out within the 1975 Act claim. The court should simply reach sufficient of a conclusion about how an ancillary relief claim would have been resolved so as to be in a position to take that factor into account in considering what would be reasonable financial provision under the 1975 Act.

 

Adopting this approach, Black J found that the Court would probably have awarded 50% of the couple’s joint assets to the wife on a divorce. The marriage was a lengthy marriage of 20 years. The Judge awarded the wife more than 50%. He thought it probable that a spouse, in a 1975 Act claim, would not infrequently obtain greater provision than on a divorce, even where the estate is a large one.

 

The level of provision was assessed by reference to the wife’s needs (in the widest sense), i.e. the provision of a house and holiday home plus a sum of capital that would serve the dual purpose of providing a top up income when necessary as well as servicing anticipated and unforeseen expenditure. It was reasonable for the wife to have this sort of security and freedom from anxiety, and that she should enjoy a similar standard of living to that which she had enjoyed during the marriage. The wife was, therefore, awarded assets valued in total at £2.9M out of the husband’s net estate of £4.5M.

Award of less than 50%

 

In other cases, the capital sum reasonably required to provide the applicant spouse in respect of (a) accommodation, (b) income and (c) capital may be less than 50% of joint assets.

 

In Fielden v Cunliffe [2006] WTLR 29 Wall L.J. made the point that, depending on the value of the estate, the concept of equality may bear little relation to such provision. The Court awarded a lump sum of £600,000. It did so by reference to the applicant wife’s needs and resources. She required £200,000 for her housing needs. In addition, she needed £400,000 (in addition to her own assets of £150,000) to provide her with a reasonable level of income, index-linked, for the rest of her life (assessed on the basis that she needed £30,000 per annum, capitalised by reference to Duxbury tables).

 

The result (an award of £600,000) was cross-checked against the equality of division yardstick. It represented 46.61% of the deceased’s estate after deduction of Inheritance Tax, and an even lesser percentage of the value of the couple’s joint assets (the wife was credited with assets of £150,000). The departure from equality was, however, justified on the grounds that the marriage only lasted a year, and that the wife had made no financial contribution to the marriage. In any event, the equality of division approach was “a less valuable tool in a case under the 1975 Act than it is under the Matrimonial Causes Act 1973”.

 

Life interest or share of capital

In Iqbal v Ahmed [2011] EWCA Civ 900 the claimant was the widow of the deceased, to whom she had been married for 22 years. The deceased gave the widow (aged 61) £8,000 plus a right to occupy the matrimonial home (worth £115,000) for life, subject to paying outgoings, insurance, repair, decoration and outgoings. The matrimonial home needed £30,000 expenditure on it to pay for repairs. The widow only had £3,000 of her own, and £8,000 under the Will.

Subject to the widow’s right of occupation, the matrimonial home was given to the deceased’s son by a previous marriage absolutely, as was the residuary estate. He was comfortably off, and had received £21,000 from the deceased as a lifetime gift.

The Judge awarded the widow, in substitution for the right to occupy the former matrimonial home, a one-half beneficial share in the property, subject to paying half the insurance and structural repairs of the property. The son appealed. It was argued that the widow only needed a right to occupy the matrimonial home and any substitute property for life, plus the residuary estate (worth £28,000). The effect of the Judge’s award was that the widow would be getting 72% of the estate (having regard to the actuarial value of her life interest). That was too much.

The appeal was dismissed. The Judge’s decision should not be overturned unless plainly wrong.

Where the estate is limited, the concept of equality may bear little relation to the amount of appropriate provision. If the widow had merely a life interest, she would soon be unable to fund the cost of repairs. The cost of repairs would exhaust the residuary estate. She would have nothing left to live on. If she moved, she would have no capital.

The widow was entitled to a “capital cushion”. The marriage had lasted 20 years. If she had a half share in the sale proceeds, she could either try to raise money to fund the repairs, or she could move. With half of the sale proceeds, she should be able to buy or rent accommodation. There would be a clean break from the son.

The case demonstrates that a widow may be entitled to more than 50% of a small estate. The award of a life interest in the matrimonial home (even if of significant notional value) may not be sufficient, if the widow does not have a “capital cushion”.

However, in Moore v Holdsworth [2010] EWHC 683 (Ch), the award of a life interest was sufficient. The widow did not need a capital cushion in order to have a secure roof over her head for life.

The deceased left his half share in the matrimonial home to a friend and some close relatives. He left his residuary estate (£40,000) to his widow, who owned the other half share.

The widow was awarded a life interest in the deceased’s share in the matrimonial home, and in any replacement property. She was not awarded an absolute interest. Her application was premised on the basis that she wished to live at the property for the rest of her life. She would be able to do that if she had a life interest. She had sufficient finances to be able to remain at the property. If she was given an absolute interest, there was a danger that the whole value of the property would be used to pay for her care home fees. On a notional divorce, she would not have been entitled to an absolute interest. Subject to providing for her accommodation, regard should be had to the deceased’s wish to benefit the beneficiaries under his Will.