Generally speaking, spouses are in a strong position when it comes to assessing their claims for reasonable financial provision from their late husband or wife’s estate under the Inheritance (Provision for Family and Dependants) Act 1975.
Spouses enjoy a lower threshold test than other claimants, and their claims are assessed by what it is reasonable in all of the circumstances to receive, whether or not for their maintenance, whereas for all other claimants, demonstrating a maintenance need is essential.
However, on Friday 12 February 2016, the Central London County Court dismissed in its entirety a claim brought by Thandi Wooldridge for further financial provision from the estate of her late husband, Ian Wooldridge. This landmark ruling is the believed to be the first time that a claim by a widow under the 1975 Act has been dismissed without any further financial provision being awarded out of the estate.
Ian Wooldridge was a successful businessman, who established the Wooldridge Group in 1978. In addition to the company, Ian and his brother also set up the Twelve Oaks Partnership in 1994, which provides polo facilities from a 140-acre estate in Windlesham, Surrey.
Mr Wooldridge died in 2010 aged 52 in a helicopter accident on his way back from a shooting trip. He left behind his wife Thandi, who he had married in 1999, and their son Rhett, (aged 6), as well as his son Charlie, (22), by a previous relationship.
Mr Wooldridge left a homemade will under which Thandi received the matrimonial home (worth in excess of £4m at the date of the hearing) and the benefit of several life assurance policies (worth some £1.6m).
Under the will, Mr Wooldridge bequeathed his interests in the two businesses to his sons, Charlie and Rhett.
Following Mr Wooldridge’s death, Thandi, Charlie and Rhett brought a fatal accidents claim in Northern Ireland in relation to the helicopter crash under which they received £1.985m, £315,000 and £200,000 respectively to compensate for their financial dependency on Mr Wooldridge.
In August 2012, Thandi commenced a claim under the 1975 Act for further financial provision from Mr Wooldridge’s estate. She claimed that her existing assets and entitlement under the Will were not sufficient to meet the standard of living which she and Mr Wooldridge had enjoyed prior to his death, which she admitted was lavish. She stated in her evidence that she had a budget for expenditure of some £372,097 per annum, including £65,000 for holidays and £21,500 on going out. She said that the life policy sums left to her had been eaten into by past debts and that although the matrimonial home had increased in value, she did not have sufficient liquid capital.
The claim was defended by Charlie on the basis that Thandi’s budget was unrealistic and not matched by what she was actually spending, that she already had sufficient financial assets to meet her needs, and that ordering further financial provision by breaking up the businesses would be detrimental to his future.
The Judge noted that the budget put forward by Thandi had increased as the case had gone on and was not matched by what Thandi was actually spending.
The Court held that Thandi had assets of some £10.5m to her name, including assets of nearly £5.3m which could be invested to produce an income for her. Contrary to the case made by her at trial, Thandi also had significant earning potential as a skilled businesswoman in the area of outdoor advertising.
The court held that even though the Deceased’s business interests were worth in the region of £40m, Thandi’s claim, which equated to circa £3.57m could not be satisfied from liquidity within the estate and that any increase in provision for Thandi would likely result in assets of the Twelve Oaks Partnership being sold off. The court held that this would be contrary to the best interests of Charlie and Rhett. The court concluded overall that Thandi already had enough to satisfy her reasonable financial needs and that the businesses needed to stay as they were to preserve wealth that was to provide for Charlie and Rhett’s future.
The case confirms the importance of the word “reasonable” when assessing the merit of claims for “reasonable financial provision” under the 1975 Act. It is not the case that all spouses are bound to receive further provision from an estate to enable them to maintain the standard of living to which they had become accustomed whilst the deceased was alive, particularly if a high standard of living should be capable of being enjoyed from the assets already available to them. If there are competing needs of other family members, such as adult children, the Court must have regard to those needs when assessing a spousal claim and it cannot be taken for granted that a spouse’s requirements will always disturb the distribution of the estate or the intended benefit to those other family members or dependants.
If you would like more information on this case or a claim under the 1975 Act, please contact Lucinda Brown on 01223 532721 or click here to email Lucinda.