In an era when claims from disappointed beneficiaries upon estates are commonplace, this STEP article sheds light on two important legal principles, namely on what basis properties are held by co-owners and the judicial flexibility that claims under the Inheritance (provision for family and dependants) Act 1975 (the Act) provides to the Courts.  In brief the Act in effect gives anyone who was financially dependent upon a deceased the potential ability to make a financial claim for provision against their estate and this case demonstrates its wide applicability.

The deceased died owning two properties.  The first of these was owned with his brother but it was not clear whether this was via a joint tenancy or as tenants in common (important as the former would mean the deceased's half share in the property would pass to the brother and the latter would mean it passes to the wife via the Will).  The deceased also owned a second let property which had a mortgage of some £80,000. 

The Courts agreed with the brother's assertion that the property was held as joint tenants but the widow had also made a claim under the Act for further financial provision from the estate.  Here it is apparent that the Courts used some particularly quick judicial thinking to re-order the deceased’s testamentary affairs in order to seek an ‘equitable’ solution. Essentially using its discretionary power the Courts disapplied the joint tenancy transfer to the brother by some £80,000 in order that the widow was passed sufficient funds to allow her to pay off the mortgage on the second property, which she received under the terms of the Will.  As such the Courts provided the widow and her daughter with a home for the rest of their lives whilst the remaining equity in the first property passed to the brother as per the terms of the joint tenancy.

This case reflects the Court's willingness to ensure proper provision is made for those it regards as financially dependent upon a deceased.  It also demonstrates the wide flexibility that the Act provides to the Courts, in this case partially revoking one fundamental legal principle in order that a 'just' solution is found.  The matter also serves as a timely reminder that those making Wills should always assess whether the properties that they own jointly with anyone are held as joint tenants or tenants in common.  If the former, then that property may well pass to the other owner at their death and possibly leave their intended beneficiaries disappointed and contemplating a costly claim against their estate. This scenario would seem a particular risk if business partners or wider family members (such as siblings) had invested in (or inherited) properties together.  Rectification action can be taken but is far simpler, and in this case far less costly, to undertake this sooner rather than later.