Death – the ultimate clean break?
As matrimonial lawyers we often talk of clean break settlements. Many people use the term, but do they understand what it means in the context of the death of their spouse or civil partner? Not everyone is perhaps aware that even after divorce or dissolution, a former spouse/civil partner can still make claims against the estate of the deceased partner.
The statute that covers such circumstances is the Inheritance (Provision for Family and Dependants) Act 1974. An old statute, that perhaps has been overtaken somewhat by the changes in society not least of which the increase in numbers of cohabiting couples and children born to unmarried partners. It has been updated to some extent by new legislation, the Inheritance and Trustees’ Powers Act 2014, which has been in effect since October 2014 and which supplements the existing provisions of the 1974 Act.
The new legislation does make changes to some of the intestacy provisions for example where a deceased died without children then the spouse or civil partner receives the entire residuary estate (rather than the first £450,000 and half remainder) and if they died with children they now receive the first £250,000 and half the remainder rather than only a life interest.
The new Act for the first time also introduces the notion of a clean break after the death of the deceased. The phrase ‘clean break’ is something often referred to in the matrimonial context. And, there is an overlap in how the court considers claims under the 1974 Act, and consequently now the new provisions of the 2014 Act.
Under the 1974 Act, a spouse (among other certain categories of claimants) can make a claim against the estate of their deceased spouse’s estate in circumstances where the deceased did not make ‘reasonable provision’ for them. This option remains available to spouses or former spouses in certain circumstances. The court has to have regard to the following:
“ the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage or civil partnership instead of being terminated by death, had been terminated by a decree of divorce or dissolution order”
The new Act amends that to include:
“ but nothing requires the court to treat such provision as setting an upper or lower limit on the provision which may be made under Section 2 (of the 1974 Act)”
The new law recognises the approach taken by the courts, and as exemplified in the case of Lilleyman v Lilleyman  EWHC 821 in which the spouse of the deceased brought a claim against her late husband’s estate after only 2 1/2 years of marriage.
7 factors considered by the court
Under the 1974 Act the court must consider:
1. the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;
2. the financial resources and financial needs which any other applicant for an order under section 2 of this Act has or is likely to have in the foreseeable future;
3. the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;
4. any obligation and responsibilities which the deceased had towards any applicant for an order under the said section 2 or towards any beneficiary of the estate of the deceased;
5. the size and nature of the net estate of the deceased;
6. any physical or mental disability of any applicant for an order under the said section 2 or any beneficiary of the estate of the deceased;
7. any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.
And where the applicant is a surviving spouse the 3 following additional factors:
1. the age of the applicant and the duration of the marriage;
2. the contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family;
3. to have regard to the provision which 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 determined by decree of divorce – the so called “divorce cross-check”.
‘Reasonable financial provision’
But, the law does not seek to apply a ‘yardstick of equality’ as espoused by the House of Lords in White v White  1 AC 596. It is designed to provide ‘reasonable financial provision’ and whilst the temptation is to compare the provision available in the discretion of the court on a divorce to that on death out of the deceased’s estate, the two are very separate. The so called ‘divorce cross check’ is nothing more than that – a comparison that the court makes when considering the reasonableness of the overall financial provision under the 1974 Act. The court is not therefore aiming to replicate the outcome as if there were a divorce. The legislation does not seek to overturn the individual’s right to leave their estate to anyone in in whatever manner they deem fit.
There is therefore nothing new for the unmarried partner left behind on the death of their cohabitee. There is still no automatic entitlement to the deceased’s estate on death in the legislation. They must still turn to the 1974 Act and satisfy the court that they have a legitimate claim for reasonable financial provision not otherwise provided for by the deceased.
If you would like advice on obtaining a full clean break on divorce, or have a family law query arising from the issues discussed above, please contact us at Paradigm Family Law on 0845 6020422 or email us at [email protected] for a free initial consultation with our family law experts.