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Archive for the ‘Wealth Protection’ Category

What is an Inheritance Act Claim?

Stuart Duncan

Stuart Duncan

Many people are under the misapprehension that the length and commitment of a relationship will grant rights akin to those in marriage. Stuart Duncan, a family lawyer with Charles Lucas & Marshall, explains why this is not actually the case and the options open to family and dependants who want to make an Inheritance Act claim.

Where an individual has died without making proper provision in their Will for their relatives or dependants, judges have a wide discretion to redistribute assets to produce a fair result.

The Inheritance (Provision for Family and Dependants) Act 1975 aims to make further financial provision for those who:

  • have not inherited as a result of intestacy (where there is no Will)
  • have been left out of a Will entirely
  • have not been left as much as they need

Only certain people are entitled to make an Inheritance Act claim. Broadly speaking, these are the immediate family of the deceased or their partner if they were living together as husband and wife (or as civil partners).

A surviving spouse or civil partner can apply for such financial provision as is reasonable in all the circumstances, whether or not that provision is required for his or her maintenance.

Everyone else is limited to such reasonable financial provision as is necessary for their maintenance, insofar as the estate can provide it.

The time limit for making a claim is usually six months from the date on which representation (Grant of Probate or Grant of Letters of Administration) is taken out and so it is very important to act quickly.

There has been an increase in recent years of Inheritance Act claims.

Earlier this year the court awarded Ms Joy Williams, a half share in her deceased partner’s house.  Ms Williams had lived with Mr Norman Martin, for nearly 20 years and they had bought a property together in Dorset in 2009.

The problem was that Mr Martin had never formally divorced from his wife, nor had made a Will leaving his share of the Dorset property to Ms Williams. Mr Martin’s share in the property automatically passed to Mrs Martin on his death.

Ms Williams made an Inheritance Act claim and the Judge found that Ms Williams and Mr Martin had in ‘all material aspects’ lived as husband and wife. He therefore decided that Ms Williams should be entitled to Mr Martin’s share of the property as well as her own share.

Whilst justice was done in the end, it would have been much less risky, expensive and time-consuming to clarify matters before Mr Martin died.

Many people are still under the misapprehension that the length and commitment of a relationship will grant rights akin to those in a marriage but this is not actually the case. If you are in a cohabiting relationship, then the best way to protect your partner is to enter into a living together agreement, hold your property as joint tenants, and/or ensure you make a Will, clearly setting out your wishes on death, in order to avoid the situation that Ms Williams found herself in.

If you are involved in a dispute over a Will or need advice on preparing one, it is important to get advice as soon as possible.

For further advice please contact Stuart Duncan on 01635 521212 or stuart.duncan@clmlaw.co.uk

Written by Stuart Duncan

September 27th, 2016 at 8:45 am

Company Assets in a Divorce

Expect Fewer ‘Hiding Places’ – Wealth Protection in Company Structures

Will Not Be Safe in a Divorce

Suzy Hamshaw, a family lawyer with Charles Lucas & Marshall, believes courts will look more closely at how company assets are held in a divorce and in particular whether they are being held on trust for a spouse.

Suzy Hamshaw - Divorce Specialist, Family Law Expert and Financial Claims on Divorce

Suzy Hamshaw

The Supreme Court has unanimously allowed an appeal by an oil tycoon’s former wife – reversing the decision of the Court of Appeal. The case addressed whether the court could treat properties belonging to a limited company as if they were assets belonging to the husband where he was the sole shareholder of the company.

In the original proceedings the High Court found that the husband had sole control of the companies and could deal with the assets as he wished and so they should be treated as belonging to him. The Court of Appeal reversed this decision, applying company law that a company and its shareholders are separate legal entities and that the assets of a company belong to it and not to its shareholders.

The Supreme Court reversed this decision but applied different principles to the High Court. In deciding the case, the court used trust law rather than company law to declare that the properties were on the particular circumstances of the case, not owned by the company but held on trust for the husband and therefore formed part of his assets on the divorce.

In doing so the Supreme Court upheld the company law principle that the corporate veil can only be pierced in very limited circumstances and that assets held by a company are not owned by the shareholders unless it can be shown there had been a fraudulent or dishonest use of the company to avoid an existing obligation.

This was an important decision both for family lawyers and company lawyers. The court was clear that the relaxed approach of family courts to ownership of assets cannot continue and that the strict interpretation of the law of property applied across all legal divisions.

However, it also sent a clear signal that the court will look closely at assets in the ownership of a company and how they came to be and that attempts to hide assets from the divorce courts by transferring assets into a company will not necessarily succeed.

This should pose no problems for properly run companies and the court has reaffirmed the law on the piercing of the corporate veil which will only happen in very rare circumstances. However, directors may wish to take this opportunity to examine their company’s asset portfolio to determine in what capacity the company assets are being held.

For further information contact Suzy Hamshaw on 01635 521212 or suzy.hamshaw@clmlaw.co.uk

Written by Suzy Hamshaw

December 9th, 2013 at 11:57 am