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09th May 2018

Cohabitant of 42 years’ standing receives capital award to satisfy her 1975 Act claim

Last month’s decision of the High Court in Thompson v Ragget turned on the vexed question of whether capital awards can properly constitute “maintenance” under the Inheritance (Provision for Family and Dependants) Act 1975. 
The standard by which claims by cohabitants under the Act are assessed is by reference to what is reasonable for them to receive for their maintenance.  There has been much debate as to whether a capital award, whether that be by way of transfer of property or a sum of money can constitute maintenance for a cohabitant, given that it confers on the claimant an asset of appreciating value and which in some cases would provide the cohabitant with more, in financial terms, than was provided for them by the Deceased.

Facts:

The claimant, Joan Thompson, had lived with the deceased, Wynford Hodge, for 42 years before his death in 2017. In his last Will, dated 19 December 2016, Mr Hodge made no provision for Mrs Thompson on the basis that she had her own money and he did not want her children to benefit from his estate.  Indeed,  he was very clear in stating in his Letter of Wishes: “I do not want Joan or her children to inherit from my estate.”

The estate was valued at just over £1.5 million and included a farm and caravan park as well as a bungalow and cottage. The entire estate was left to the defendants who were tenants of one of the deceased’s properties which they had occupied since 2015. The tenants were not related to Mr Hodge and lived a fairly frugal existence.

Contrary to statements made by Mr Hodge in his Letter of Wishes to the effect that Mrs Thompson had her own money, her personal assets position was poor, amounting to savings of only £2,500 and an income of £1,114 per month from state pension and disability living allowance.

Following a stroke in 2006 Mrs Thompson required ongoing medical care. In 2015 the decision was made for her to move to a local nursing home. However, Mr Hodge wanted Mrs Thompson to live at home and so in 2016 Mr Hodge purchased a cottage with the intention that it would become the couple’s permanent home. Unfortunately, that same year, Mr Hodge’s health deteriorated and he was eventually admitted to hospital. He died shortly after being discharged. Mrs Thompson asserted that during his time in hospital he assured her that she would be well looked after if he were to die.  Following his death, Mrs Thompson had returned to stay in a nursing home but GP said she would become unnecessarily institutionalised if she were to stay there.  An occupational therapist undertook an assessment and found that she could manage living in the cottage if it was adapted to her needs and if she had carers living there. 

The Court’s Decision

His Honour Judge Jarman QC concluded that it was appropriate and reasonable for Mrs Thompson to live in the cottage as that was the reason for its purchase. The Judge considered whether the cottage should be transferred outright or by virtue of a life interest with the power of advancement. In Illot v The Blue Cross and Ors decision of last year, the Supreme Court had held that the Act conferred the power to provide maintenance, not to confer capital. The question then arose as to whether an outright transfer of property could constitute maintenance. Stating that each case should be taken on its facts, Judge Jarman decided that due to the age and care needs of the claimant, along with the length of time of the cohabitation, it was reasonable to provide Mrs Thompson with accommodation in which no other party had an interest. He further ordered that Mrs Thompson should receive £160,000 for her maintenance and a little over £23,000 to pay for required adaptations to the cottage.  

The judgment enables Mrs Thompson to live and be cared for by her son and daughter-in-law in her own home with the security that it would not be taken from her. It further allows the tenants to inherit the vast majority of a substantial estate as intended by Mr Hodge.

How can we help?

Claims under the Act are becoming increasingly common both for testate and intestate estates. Hewitsons has a dedicated team specialising in contentious probate matters, led by partner Lucinda Brown. If you are considering such a claim or are concerned that someone might bring a claim against you or a deceased relative’s estate, please get in touch for expert, friendly advice.
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