Elena Klein v Cripps Trust Corporation Limited & Anor

Under the Inheritance (Provision for Family and Dependants) Act 1975, reasonable financial provision for a surviving spouse is assessed objectively and in all the circumstances. The deceased’s stated intentions are relevant but do not determine reasonableness.

The statutory factors have no fixed hierarchy. In a long marriage, the divorce cross-check may be highly relevant, although it does not impose an upper or lower limit. The court may make provision addressing the spouse’s needs, the needs of a child, and the practical uncertainties of estate administration. Pre-nuptial or similar agreements may carry little weight where they were made without legal advice, under financial dominance, or would leave the surviving spouse in real need.

The claimant, the widow of Alexander Klein, applied under the Inheritance (Provision for Family and Dependants) Act 1975. The deceased’s Will left her £300,000 but made no provision for the family home or continuing maintenance. It made other pecuniary and charitable dispositions, with the residue largely directed to discretionary charitable trusts.

The estate’s administration had been substantially delayed and complicated by the conduct of the former executrix, Cydlia Adler. Cripps Trust Corporation Limited, the replacement executor, represented the estate and charitable beneficiaries. The central questions were whether the Will made reasonable financial provision for the claimant, what award should be made having regard to the statutory factors and the divorce cross-check, and how the award should be structured given uncertainty over the estate’s realisable value.

1. Failure of reasonable provision. The Will did not make reasonable financial provision for the claimant. The statutory test is objective. The deceased’s wishes were relevant circumstances but could not determine what was objectively reasonable.
2. Statutory assessment. The factors in section 3 of the Inheritance (Provision for Family and Dependants) Act 1975 have no fixed hierarchy. Their relevance depends on the circumstances. The claimant had limited resources, negligible foreseeable earning capacity, significant health and family responsibilities, and a continuing need for a suitable family home.
3. Divorce cross-check. The court treated the provision which the claimant might reasonably have expected on divorce as an important cross-check. The long marriage, the claimant’s homemaking and caring contribution, the presence of a minor child and the length of the marriage supported equality as a starting point. Pre-marital wealth justified possible departure from equality, but the uncertainty surrounding the estate made a precise divorce comparison impossible.
4. Agreements. The pre-nuptial agreements carried no weight. They had been prepared without legal advice, in circumstances of marked financial dominance and inadequate understanding, and were inconsistent with the parties’ subsequent conduct. The approach in Granatino v Radmacher [2011] 1 AC 534 was relevant to the assessment.
5. Award. The claimant was to receive the former matrimonial home free of mortgage and lump-sum provision of £1,864,089, including immediate capital needs, capitalised income needs and provision for Elliot. The award was to be paid by instalments. The claimant and Elliot took priority over other beneficiaries to the extent necessary to secure the minimum award.
6. If the net estate exceeded the amount needed to satisfy that minimum, the claimant was to receive 40% of the overall net estate, preserving provision for the deceased’s relatives, friends and charities.
7. Given Ms Adler’s conduct of the administration and litigation, she was ordered to bear the claimant’s costs on the indemnity basis, deductible from her share of the estate.