Lilleyman v Lilleyman

Under the Inheritance (Provision for Family and Dependants) Act 1975, the court must first decide whether the will made reasonable financial provision and, only if it did not, determine the appropriate order. For a surviving spouse, reasonable provision is not confined to maintenance. The statutory factors have no fixed hierarchy and may carry different weight according to the facts. The divorce cross-check is neither a floor nor a ceiling. In a short-marriage, substantial-estate case, the court may consider needs, compensation and sharing, while giving proper weight to the source and nature of assets and the length of the marriage. A clean break may justify an outright transfer of property where that better meets housing and financial-security needs than a life interest.

The claimant, the widow of the deceased, applied for reasonable financial provision from his estate. The marriage had lasted two and a quarter years, or slightly less than four years including prior cohabitation. The estate was worth just over £6 million and was largely constituted by shares in family companies. The defendants were the deceased’s sons, executors and principal beneficiaries under his will.

The central dispute was whether provision should be assessed solely by reference to the claimant’s needs and lifetime security, or whether the court should also recognise her contribution and a share in matrimonial property. The court considered the statutory criteria and the required divorce cross-check.

1. Two-stage statutory approach. The court first asks whether the will made reasonable financial provision. Only if the answer is no does it decide whether, and to what extent, to exercise the powers under section 2 of the Inheritance (Provision for Family and Dependants) Act 1975.
2. For a surviving spouse, reasonable financial provision means what it is reasonable in all the circumstances for a husband or wife to receive, whether or not required for maintenance. The matters in section 3 have no hierarchy. Their weight is infinitely variable according to the facts. The relevant obligations and responsibilities may include moral, as well as legal, obligations.
3. The divorce cross-check is an aid to the assessment, not a floor, ceiling or requirement for a meticulous parallel divorce calculation. It has variable weight. In a short-marriage case, the court must not treat Cunliffe v Fielden as establishing that reasonable provision is always confined to the surviving spouse’s needs. Considerations of compensation and sharing may remain relevant.
4. The divorce principles supplied a useful cross-check. The source and nature of property mattered. The value of a pre-existing family business, particularly where recourse to it might cripple the business, could properly be excluded or substantially protected. Growth attributable to activity during the marriage could nevertheless be treated differently from passive economic growth.
5. The will plainly failed to make reasonable provision. The appropriate award was assessed objectively by reference to facts known at the hearing. A clean break was important because relations had broken down. An outright transfer of the estate’s share in Water Meadows, and a transfer of Dunhome or its agreed value subject to surrender of occupation rights, better met the claimant’s housing and security needs than a life interest. The estate’s apparent interest in Lea Court was also transferred, either because it was beneficially the claimant’s or, alternatively, as a necessary part of reasonable provision.
6. The claim therefore succeeded. The claimant retained the chattels given by the will, including the toy and coin collections, and the estate was to bear the tax consequences of the transfers.