Mr Hodge and Mrs Thompson lived together for 42 years, under the much misconceived idea of being common law husband and wife, until Mr Hodge’s death in 2017. Mr Hodge was a farmer with an estate valued at over £1.5m, which included cottages, a caravan park, farming machinery and vehicles.
Over the years Mr Hodge made several wills. However, at the time of his death, Mr Hodge’s most recent will – which he made in 2016 – did not provide for Mrs Thompson. His letter of wishes not only explained that Mrs Thompson was financially comfortable, but that he also had a clear distrust of Mrs Thompson’s children. He therefore decided to make provisions for his estate to be left to two tenants who had resided in one of his properties since 2015.
In order to bring a claim against an estate, a claimant must satisfy the court that they fall within one of the categories set out under s1 of the Inheritance (Provision for Family and Dependants) Act 1975.
Key categories which are relevant in this case include:
- Those who were, during the two years prior to the deceased’s death, living in the same household with, and as the spouse of, the deceased; and
- Any person who immediately prior to the deceased’s death was being wholly or partly maintained by the deceased.
There was little doubt Mrs Thompson was entitled to bring a claim, either as a cohabitee of, or being maintained by, the deceased. But she had the burden of proving what financial provision was reasonable for her to receive.
In deciding what award to make, the judge considered a number of factors, including:
- Mrs Thompson’s own financial savings, and how any state benefits she received would be unaffected by the award;
- The resources and needs of the tenants, and in particular, that even after an award to the Mrs Thompson, the estate they would inherit was substantial and was likely to exceed their original expectations;
- The obligations and responsibilities which the deceased had towards Mrs Thompson or towards the tenants, making particular note that in 11 previous wills provisions had been made for Mrs Thompson, whereas the deceased had assumed little responsibility for the tenants;
- The size and nature of the estate (including potential tax liabilities); and
- Mrs Thompson’s disability, age and the fact she cohabited with the deceased for 42 years.
The judge found that financial provision from the estate should be granted to Mrs Thompson. This included the house which had been her home for 42 years, deciding it was not reasonable to move her elsewhere.
The judge also had to consider whether the claim should be satisfied by granting a life interest in the property or by an outright capital transfer to Mrs Thompson. Choosing the latter, he said Mrs Thompson would then have the ability to make structural changes to the property, raise money, and take other decisions regarding the home without having to consult the tenants. In total, Mrs Thompson was granted a cottage worth £225,000 and a lump sum of £160,000.
Whilst not ground-breaking new law, this decision is important in that it considers the remedies courts are likely to exercise in these cases – namely how interest in property should be provided. In the recent case of Illot v The Blue Cross & Others the Supreme Court stressed that its only power is to provide maintenance and not to ‘confer capital’. In this instance, however, the judge decided to award an outright capital transfer of the house to Mrs Thompson, departing from what Illot had suggested was the general rule.
The case also directs itself to providing greater protection to cohabitees in terms of provision under the deceased’s estate who have traditionally faced an uphill struggle to inherit where there has been no will in place. In any event, cohabitees remain constrained by the statutory limitation that any provision must be for their maintenance, and it remains important for cohabiting couples to have carefully considered wills in place.
For more information on disputes of this nature, or to discuss any agriculture-related dispute, please contact Robert James or another member of Thrings’ Agriculture team. To find out how we can help with other matters relating to succession, please contact a member of the Inheritance and Succession Planning team.
