The recent case of Shapton v Seviour (2020) provides a welcome example of the Court coming to what many would consider to be a sensible conclusion to what, on the face of it, was a frivolous claim brought under the Inheritance (Provision of Family & Dependants) Act 1975 ("the 1975 Act"), and will hopefully help to combat the seemingly increasing number of similarly speculative claims.
In this article, Chris Drinkall looks at the Shapton v Seviour (2020) case and the 1975 Act, before setting out, with the assistance of Emma Fawke, the steps can be taken to try and mitigate the risk of any possible claims under the 1975 Act arising.
Shapton v Seviour (2020)
Background to the case
Colin Seviour died on 8 August 2016. As at the time of his death, he and his wife Maria, who had married in March 1999, had been married for 17 years. Mr and Mrs Seviour had 4 children, 2 each from previous marriages.
On 6 December 2013, Mr Seviour had made what turned out to be his final will, which provided that his entire Estate was to pass to Mrs Seviour on his death. Had Mrs Seviour predeceased Mr Seviour, Mr Seviour's Estate would have been divided equally between his children and stepchildren.
It is also understood that Mr Seviour was, when drawing up his will, advised as to the possibility of leaving his Estate, in part or in full, in Trust for the 4 children, but opted against doing so.
As at his death, Mr Seviour's Estate was valued at £268,000, the majority of which was his share in the matrimonial home (his share being valued at £215,000), and £51,000 in insurance policies.
At the time of Mr Sevior's death, Mrs Sevior was employed by the NHS and was working 3 days a week, and she had no prospect of receiving her pension until 2030.
Just under a year after her husband's death, Mrs Seviour was dealt another heavy blow, being diagnosed in November 2017 with motor neurone disease. In addition to the obvious heath consequences that Mrs Seviour's diagnosis had upon her, it also had knock on financial consequences. She spent most of her savings adapting her home to take into account her worsening condition, and had to give up her employment the NHS.
As a result, Mrs Seviour was left with her home, some bonds, and savings of just over £14,500, and reliant on state benefits. She received a monthly income, taking into account state benefits and a nominal payment she received each month from the pension protection fund, of a little under £1,380. As at the date of the trial in March 2020, she was wheelchair bound, and dependant on her daughter and carers for her personal hygiene and day to day care.
Carly Shapton was the daughter of the late Mr Seviour. The relationship between Mrs Shapton and Mrs Seviour was far from harmonious whilst Mr Seviour was alive and that relationship did not improve following his death.
So bad was the relationship between Mrs Seviour and her 2 step-children that following her husband's death, she made a new will and dis-inherited Mrs Shapton and her step-son Christopher (Christopher being Mrs Shapton's brother and the son of the late Mr Seviour). In his judgment, Deputy Master Lloyd noted that the relationship between Mrs Shapton and Mrs Seviour as at the time of the trial was "frankly toxic". We suspect that it has not improved.
Mrs Shapton claimed that she was entitled to one quarter of her father's Estate given their "incredibly close relationship". Mrs Seviour disagreed. Mrs Shapton subsequently issued a claim under the Inheritance (Provision of Family & Dependants) Act 1975 for £75,000 from her late father's Estate, that sum apparently being required so she could purchase a larger house so that each of her 2 small children could have a bedroom of their own, and her husband could have some office space.
Inheritance (Provision of Family & Dependants) Act 1975.
Let us pause there briefly to remind ourselves of the key provisions of the Inheritance (Provision of Family & Dependants) Act 1975 ("the 1975 Act").
Individuals who fall within one of the categories of applicants set out at section 1 of the 1975 Act (which include but are not limited to spouse or civil partner of the deceased, children of the deceased) who consider that the Estate of a deceased has not, either under a Will or by virtue of the law of intestacy where no Will has been made, made reasonable financial provision for them, may apply to the Court under the 1975 Act for an Order that such provision be made.
The provision that can be made depends on the Claimant's status, specifically
- The provision for a Claimant who is the spouse of the deceased (or others who are treated as spouses or civil partners) is based on what it is reasonable for the Claimant to receive, regardless of whether it is for their maintenance or not
- The provision that can be sought any other claimant is such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance.
The status of the Claimant is important to the provision that may be awarded. What to award, if anything, is entirely at the Court's discretion, which will be exercised following consideration of factors that are set out in Section 3 of the 1975 Act ("the Section 3 Factors"). The main Section 3 factors, which are at the heart of all 1975 Act claims, comprise
- the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future
- the financial resources and financial needs which any other applicant for an order under section 2 of the 1975 Act has or is likely to have in the foreseeable future;
- 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;
- any obligations and responsibilities which the deceased had towards any applicant for an order under the section 2 of the 1975 Act or towards any beneficiary of the estate of the deceased;
- the size and nature of the net estate of the deceased;
- any physical or mental disability of any applicant for an order under section 2 of the 1975 Act or any beneficiary of the estate of the deceased; and
- 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.
Depending on the status on the status of the Claimant, there are also additional factors that may need to be considered too.
Whilst the section 3 factors allow the current financial circumstances of a Claimant to be taken into consideration together with their likely needs in the future, there is also the clear need to carefully take into consideration the needs of other potential beneficiaries of the Estate, including claims of the main beneficiary.
Relevant factors and Judgment
So, turning back to Mrs Shapton's claim, as an adult child of the late Mr Seviour (being one of the classes of individuals who could make a claim under the 1975 Act), Mrs Shapton was only entitled to claim provision from the estate as is reasonable for her maintenance, taking into account the Section 3 factors.
As at the date of the trial of this dispute, she was 32 years old, with 2 young children. She owned a 3 bedroom semi detached house (her home was said to be worth £240,000), and both she and her husband, Jake, worked in the hospitality industry and were in receipt of a good income that was subsequently regarded to be "more than adequate to meet their day to day needs".
So, to summarise, on the one hand, we have
- 32 year old Mrs Shapton, who was in good health, was a home owner, married, had a good level of household income that was more than sufficient to meet her and her family's needs, and she enjoyed a good standard of life.
And on the other we have
- terminally ill, widow Mrs Seviour, unable to work, whose health was deteriorating, whose assets comprised her home, a small amount of savings and some bonds, and who had limited liquid funds and was reliant on state benefits.
When a claim is brought under the 1975 Act it is for the Court to consider the facts of each case and apply these to the relevant Section 3 factors and apply such weight to each of the section 3 factors as it sees fit. It is because the Court retains the discretion as to what weight to give each section 3 factor that it came sometimes be difficult for lawyers to assess the merits of a claim.
However, looking at the difference in financial position of both parties to this dispute, the background to the claim, and the provisions of the 1975 Act, readers could be forgiven for asking how the matter ever reached trial; the claim looks speculative at best. It was, therefore, unsurprising that the claim was dismissed.
Deputy Master Lloyd considered the Section 3 factors set out in the 1975 Act and took account of the fact that the late Mr Seviour's Estate (of which most, as mentioned above, was tied up in the property) was only modest, and also Mrs Seviour's illness meant that she was reliant on her late husband's estate to enable her to live out her remaining years in comfort and with dignity.
It appears from the judgment that Mrs Shapton sought to suggest that she and her husband were of limited financial means, highlighting that she had no savings or assets, large credit card debts, and were incurring loan, credit card and bank charges of around £450 per month.
However, her claims of financial hardship were clearly not accepted by Deputy Master Lloyd, who commented that her suggestions that they could only afford a holiday if it was put in a credit card as being "disingenuous at best" given it was apparently clear that Mrs Shapton and her husband had enjoyed "several very luxurious holidays with [her husband's] parents, that they had "had the use of a speed boat" and her grandmother had assisted them with the deposit on their house.
Deputy Master Lloyd considered that it was clear that Mrs Shapton's claim was motivated by her belief that she was entitled to a quarter of her father's Estate. He found that to be misguided, highlighting that the late Mr Seviour's will was very clear as to how his Estate should pass on his death - everything should pass to Mrs Seviour - and the fact that Mrs Seviour had changed her will was entirely her prerogative.
Those of you who find yourselves occasionally reading Court judgments will know that Judges tend to restrain themselves when commenting on the merits of cases and/or the conduct of one or more party, often to the frustration of those of us in the legal profession who would welcome (not in our own cases of course!) the judiciary speaking more bluntly, as it may discourage frivolous claims or defences being pursued.
It is refreshing and welcome, therefore, that when making his Judgment and dismissing the claim, Deputy Master Lloyd stated that the claim was "absolutely hopeless". It is understood that when determining the issue of costs (he ordered that Mrs Shapton bear the costs of the proceedings), Deputy Master Lloyd commented that the claim "never stood a reasonable prospect of success".
How to mitigate the risk of claims under the 1975 Act.
There are undoubtedly cases where Claimant's have legitimate claims under the 1975 Act. At the same time, however, there is a widely held view in the legal profession that in recent years, there has been an increase in claims by, dare we say it, chancers, who, buoyed by the success of Claimants in well publicised cases, have seen fit to pursue claims under the 1975 Act, often with the benefit of Conditional Fee Agreements (aka "no win no fee" costs arrangements).
So what, if anything, can be done, to try and avoid the risks of such claims being pursued?
First and foremost, make a Will. Not only that, but take the time to take proper legal advice in creating and drafting the Will. Spending a little bit of time and money now, could save months, even years, of hassle and heartache, and many thousands of pounds, later.
The potential claims of all relevant family members and dependants should be considered fully. It is also important to ensure that your solicitor makes a clear and written record of ay decision made not to make provision for certain people, particularly those who may be able to make a claim under the 1975 Act.
Where there are children from previous relationships, particular consideration should be given to the possibility of the survivor of a couple changing their will and disinheriting your own children. Whilst nothing in the 1975 Act takes away the absolute right and freedom of testamentary capacity (a person's legal and mental ability to make or alter a valid will), the 1975 Act does enable the Court, in circumstances where it considers it to be justified, to intervene in this freedom.
One possibility is to consider setting up a property trust, giving the survivor the right to remain living in the matrimonial home for life. This is one way for a testator (the person making the will) to remain in control of who their Estate passes to, whilst ensuring the surviving spouse or partner has the protection of a roof over their head. As mentioned above, it is understood that in the Seviour case, Mr Sevioir was made aware of the ability to put his share of the matrimonial home into Trust for his children, but declined to do so when making his final Will.
Most would be forgiven for thinking that no one has a right to dictate how a person decides to deal with their Estate, but it is easy to see why Mr Seviour's two children may feel disgruntled knowing their step siblings would benefit from their father's Estate in the future.
The 1975 Act provides the Court with the ability to make provision for a Claimant in circumstances where the Court considers that a Will or the intestacy rules do not make appropriate provision for a Claimant given the particular circumstances of a case. Given the wide discretion enjoyed by the Court, it is therefore not possible to completely eliminate the risk of a claim being made under the 1975. Appreciating the 1975 Act, and addressing the potential for a claim will, however, certainly make it harder to for a successful claim to be brought.
Chris Drinkall is a partner in Rollits' Dispute Resolution Department. He and his colleagues in the Dispute Resolution Team regularly advise on claims under the 1975 Act and other contentious probate matters.
Emma Fawke is a senior solicitor in Rollits' Private Client Department. The Private Client Team have a wealth of experience in advising upon and drafting wills, and estate planning.
Originally published June 30, 2020.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.