The outcome of a claim under the Inheritance (Provision for Family and Dependants) Act 1975 is notoriously difficult to predict. Depending on the category of claimant, there are nine statutory factors – including the financial resources and needs of the applicant, and the size and nature of the deceased’s net estate – which the court must consider when assessing, first, whether reasonable financial provision has been made for the claimant (viewed objectively); and second, if the answer to the first question is ‘no’, what provision should therefore be made.
The factors which the court may consider become wider still in cases where the claimant is the deceased’s spouse or civil partner. Under section (1)(2)(a) of the act, the test is ‘whether there is such financial provision as it would be reasonable in all the circumstances for a [spouse] to receive, whether or not that provision is required for their maintenance’ (Iqbal v Ahmed, emphasis added).
In such cases, one factor which the court may consider – and on which it can be tempting to hang predictions as to the outcome – is a calculation of the provision which the claimant might have expected to receive had the marriage terminated by divorce or dissolution, rather than death (section 3(2) of the act). The legislation is clear, however, that no section 3 factor is to be given more weight than any other. Section 3(2) expressly states that the answer to the ‘hypothetical divorce’ calculation should not set an upper or lower limit on the provision which can be ordered. Yet it is easy to see why this factor might be viewed as a clear means for the court to reach a decision on quantum – not least where it can be guided by the ‘yardstick of equality’ (that is, a starting point of 50% of the deceased’s and the applicant’s combined assets, together with a ‘clean break’) from the seminal family case of White v White.
In the 1991 case of Moody v Stevenson, the ‘divorce hypothesis’ was treated as the central factor in the claim. In his judgment, Waite J deemed ‘a consideration of the presumed entitlement of the [spouse] under a notional divorce’ to be the ‘starting point’ when ‘fixing an appropriate provision under section 2 of the act’. The other section 3 factors were considered in light of the outcome produced by the divorce hypothesis.
Later authority suggests, however, that there was an over-reliance on the hypothetical divorce factor in Moody – not least because treating this factor as the ‘starting point’ ignores the express direction in the legislation to treat the section 3 factors equally. Per Re Besterman – a judgment which conflicts with Moody (see Re Krubert) – ‘the figure resulting from the section 25 [Matrimonial Causes Act 1973] exercise is merely one of the factors to which the court is to “have regard”, and the overriding consideration is what is “reasonable” in all the circumstances’.
Numerous subsequent authorities expressly refer to the deemed divorce factor as a ‘cross-check’, rather than the ‘starting point’. This suggests that the divorce factor is to be applied once the court has completed its assessment of quantum on the basis of the other factors, as a way of retrospectively determining the ‘reasonableness’ of the award.
In the 2023 case Re Singh, however, the hypothetical divorce factor appeared to be the defining factor in determining quantum, despite being referred to as a ‘cross-check’: ‘The divorce cross-check points unerringly towards an equal division of the assets. C expressly avers that such a division would meet her needs […]’. The decision that the provision in the will was not reasonable, however, was made on the basis of a balancing exercise incorporating each of the sector 3 factors. Peel J’s approach in this case therefore appears to affirm the notion that the divorce factor, and more specifically the ‘yardstick of equality’, is likely to strongly influence decisions where there are ample assets available, and where the entitlement of the spouse is not restricted by the competing demands of other beneficiaries.
While Re Singh may demonstrate the importance of the divorce hypothesis on quantum in cases where there is little else to guide the court, numerous other authorities emphasise the differences between divorce and 1975 act claims, warning against overemphasis on the divorce hypothesis.
In Re Krubert, in which the first instance decision was overturned by the Court of Appeal for over-reliance on the divorce hypothesis, it was noted that in small-asset cases, ‘the hypothetical divorce approach [can] produce financial provision below reasonable financial provision within the 1975 act’, because ‘on divorce there are two parties to be provided for, whereas on an application under the 1975 act there is only one’. The general absence of the need to ‘share’ (except with other claimant beneficiaries) demonstrates the ability of the court to stretch the estate’s resources further than they might be able to in a financial remedy case, to meet the reasonable needs of the claimant.
A further fundamental difference between divorce and 1975 act claims is the requirement to heed testamentary freedom. While the court may adopt a highly interventionist approach in financial remedy cases, the court’s discretion is impacted, in 1975 act claims, by the need to give due weight to testamentary freedom. As Wall LJ observed in Cunliffe v Fielden, ‘divorce involves two living spouses, to each of whom the provisions of 25(2) of the MCA 1973 apply. In cases under the 1975 act a deceased spouse is entitled to bequeath his estate to whomsoever he pleases: his only statutory obligation is to make reasonable financial provision for his widow’. Accordingly, ‘the concept of equality – as in White – may bear little relation to such provision’. Thorpe J similarly observed in Davis v Davis that it is not for the court to ‘rewrite the testamentary provisions of deceased persons lightly’, while in Iqbal the court noted that ‘testamentary provisions are to be respected, subject to the need to ensure that reasonable financial provision is made for the applicant’. This arguably runs contrary to the ‘yardstick of equality’ approach adopted in Re Singh. If a spouse is left with nothing, and the claimant’s needs can be met by less than 50% of the estate (taking into account all the sector 3 factors), then the testamentary provisions of the deceased, while not referred to in statute, should perhaps be regarded as a ‘restraining’ factor.
Although these cases are necessarily fact-specific, the common thread which emerges is that practitioners must be careful not to over-emphasise the divorce hypothesis as being indicative of the likely outcome of a spousal claim. While it is a useful ‘balancing’ or ‘checking’ factor, often adopted as a means of ascertaining that the claimant has not, as far as possible, been left worse off as a widow than they would have been as a divorcee (Re Singh), the fact remains that 1975 act and financial remedy cases are fundamentally different.
The yardstick of equality clearly forms a helpful indicator in large-asset cases with limited competing claims. This will often be an unrealistic starting point, however, where resources are limited, there are competing claims, or the section 3 balance requires more or less to be awarded. While their parallels are evident, death and divorce are not the same: practitioners must be wary of conflating the two.
Daniel Watson is a senior associate and Sophia Smout an associate at Hunters
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