Judgement has now been handed down in the Inheritance (Provision for Family and Dependants) Act 1975 (‘the Act’) case of Sargeant v Sargeant & Anor  EWHC 8 (Ch).
The Act is designed to make provision for certain categories of claimant who do not consider, and the court agrees, that reasonable financial provision has been made for them under a person’s will (or statutory intestacy rules in the absence of a will). The categories of claimant include, principally, spouses, children, cohabitants and other persons being maintained financially by the deceased person.
Usually, claims have to be brought within six months of the date of the grant of probate in the estate. It is possible to seek to apply to the court for permission to bring a claim out of time, but this permission is only granted in limited circumstances, and the case of Sargeant v Sargeant only serves to highlight this.
Background to the case
Jon Sargeant died in May 2005 and probate in his estate was granted in 2006. He left his £3.2M farming estate to a family trust of which his wife Mary and daughter Jane, and her children, were named as potential beneficiaries. The trust was discretionary which meant that the trustees had complete discretion as to who benefits from the trust and at what time and in what proportions.
Initially, there was no dispute. After the date of death parts of the farmland were granted planning permission and the value of the estate rocketed as such to £8M, but although asset rich it was cash poor, and Mary was in financial difficulty. A dispute then arose between Mary and Jane leading Mary to seek to bring a claim under the Act. However, she was out of time given that, at the time she originally sought to make the application, it was approaching ten years after the date of the grant of probate.
The Act lays down no restrictions or requirements for the exercise of the court’s discretion to grant permission to apply out of time, but the onus lies with the claimant to establish sufficient grounds for departing from the general rule and depriving those that are protected by it out of its benefits. The court will look at the whole of the circumstances including the reason for the delay, the promptitude with which the claimant did take steps to commence their action and whether they have an arguable case with which to go to trial generally under the act.
In this case, Mary probably did have an arguable case under the Act, because a potential beneficiary under a discretionary trust has no guaranteed entitlement and that is unlikely to be deemed to be sufficiently reasonable financial provision for a spouse. Mary advanced her need to bring the application out of time on the basis that she did not understand the financial implications of her position as a discretionary beneficiary. Jane opposed the application on the basis that, given the passage of time, her and her family had a legitimate and reasonable expectation to benefit from the trust.
The High Court rejected the application holding that Mary had had every opportunity to seek legal advice and chose not to so the delay on her part was unreasonable, having some sympathy with Jane’s position. HHJ Cooke stated 'This is not a case in which any material facts have been concealed from Mary at any stage, or where she has been misled by Jane or the trustees’ ... 'Nor is it a case in which the claim is been made necessary by any supervening event outside Mary's control ... ‘The reality is that Mary took her own decision to continue to work within the arrangements provided for by the will, rather than to explore whether she had any option available to vary them, in the full knowledge of the financial difficulties she was under, and maintained that decision over a very long period'. Permission to apply out of time was therefore refused, leaving Mary unable to pursue her claim and therefore without recourse under the Act.
With this case highlighting the difficulty to apply under the Act out of time, the importance of getting early advice cannot be emphasised enough, even where a will dispute is not initially anticipated; as a claim, if meritorious, needs to be bought at an early stage.