Your spouse may have a Will in place which leaves some or all of their estate to you. However, over 50% of UK adults have no Will in place.
If your spouse dies without having a valid Will, their estate will be governed by the intestacy rules. The intestacy rules set out who will inherit in order of priority. The amount which you will inherit from your spouse’s estate will depend on the size of their estate and whether or not they have any children.
If your spouse’s Will or the intestacy rules do not make adequate provision for you, then you may have a claim under the Inheritance (Provision for Family and Dependants) Act 1975 (often known as the “1975 Act”).
The 1975 Act allows certain categories of people to bring claims against estates if reasonable financial provision has not been made for them. Spouses are entitled to bring these claims, and are treated more favourably than other categories of claimant.
Your claim under the 1975 Act would be for reasonable financial provision from your spouse’s estate. A court would look at what financial provision it would be reasonable for you to receive in all of the circumstances. The court will look at a number of factors to determine this, including your financial needs and resources, the financial needs and resources of the other beneficiaries and the size of the estate. In claims brought by spouses the court also looks at the following additional factors:
- the age of the applicant and the duration of the marriage;
- 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; and
- 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 terminated by a divorce order.
The third bullet point is often referred to as the “divorce cross check”. Essentially, the court will look at what financial provision you might have been entitled to if you and your spouse had divorced during their lifetime. The court is not bound to award you the same amount under the 1975 Act as you would have received on a divorce, but it is one of the factors which the court will consider.
There is often a misconception that the divorce cross check means that the starting point is that everything should be divided 50/50 between the spouses. In reality, family courts have a great amount of flexibility when deciding what financial orders to make on divorce. The recent Supreme Court case of Standish v Standish shows that assets which one party has brought into the marriage will not necessarily be divided between the couple. In this case a wealthy husband had brought assets of around £125 million into the marriage, and had transferred them to his less wealthy wife for tax purposes. Despite the transfer, the assets were treated as ringfenced for the husband and they would not be divided between the couple.
This case highlights the complexity of the divorce cross-check under the 1975 Act, and the uncertainty this can produce. If you are concerned about the inheritance which you will receive from your spouse then please get in touch, and one of our specialist team will be happy to help.