Shama Amnir & Ors. v Fahid Bala & Ors.

In claims under the Inheritance (Provision for Family and Dependants Act 1975, reasonable financial provision is assessed objectively by asking whether the disposition produces an unreasonable result and, if so, what order is reasonable in all the circumstances.

For maintenance-based applicants, need is necessary but not sufficient. The court must balance competing needs, moral obligations, available resources, testamentary freedom and the size and nature of the net estate. Where the estate is insufficient to meet all reasonable needs, awards must be based on the estate as ultimately realised, rather than a hypothetical valuation.

Litigation costs are not automatically payable from the estate. They may be paid first from the estate where the circumstances, consent of those benefiting and the competing claims make that course justifiable.

Four claimants brought claims under section 2 of the Inheritance (Provision for Family and Dependants) Act 1975 against the estate of Mohammed Amnir Bala. Shama Amnir was the deceased’s surviving spouse. AB and CD were his minor sons. MN, his adult daughter, was a protected party with significant learning difficulties and care needs.

The estate comprised several properties and other assets, but its value and liabilities remained uncertain. The estate had also been substantially depleted by litigation costs. The central issues were whether the will made reasonable financial provision, how the competing needs of the spouse, minor children and adult disabled daughter should be balanced, how uncertainty in the net estate should be addressed, and whether the parties’ costs should be paid from the estate before making the awards.

1. Claims established. The will objectively failed to make reasonable financial provision for Shama, AB, CD and MN. Shama’s claim was not limited to maintenance. The claims of AB and CD were maintenance-based, while MN had a strong moral claim arising from her lifelong disabilities, dependence and relationship with the deceased.
2. The assessment was objective. The issue was whether the will produced an unreasonable result, not whether the deceased acted unreasonably. Need was necessary but not sufficient for the children and MN. The court had to balance their needs, the deceased’s obligations, the needs and resources of other beneficiaries, conduct, testamentary freedom and the size and nature of the estate.
3. The court should assess awards by reference to the net estate as it proves to be at the end of administration where the estate is insufficient to meet all claims. A hypothetical valuation was inappropriate. The uncertainty in the estate’s value materially limited the awards.
4. Shama’s housing need was the first priority because she cared for the minor children. The divorce analogy was a statutory cross-check, not the starting point, and did not impose a percentage entitlement. Provision for the children could properly be made through an award to Shama, who had parental responsibility and would meet their needs.
5. Independent accommodation and extensive private care for MN could not realistically be funded from the estate. Some provision was nevertheless required for therapy, respite care, mobility, continence and related needs. The court ordered a fund of up to £150,000 for MN, to be held on a trust compliant with section 89 of the Inheritance Tax Act 1984, with a deputy appointed as trustee.
6. The claimants’ litigation costs were to be paid from the estate first, after testamentary expenses and administration costs, and assessed on the indemnity basis unless agreed. Costs were not automatically payable in 1975 Act claims, but the consent of the persons benefiting and the fact that the estate would otherwise be exhausted justified the order in this case.
7. After costs, Shama was awarded £550,000 as the first charge on the estate. The next £300,000 was to be divided equally between Shama and MN, and any balance was to go to Shama. If the net estate was below £550,000, it was to be awarded entirely to Shama.