Miles & Anor v Shearer  EWHC 1000 (Ch) (23 April 2021) - https://www.bailii.org/ew/cases/EWHC/Ch/2021/1000.html
Can an independent adult make a claim for reasonable financial provision from their parent’s estate under the 1975 Act? This 2021 High Court ruling demonstrates that adult children will not necessarily receive financial provision where there is no financial need, irrespective of the size of the estate.
Anthony Presley Shearer (‘Tony’), a former partner at Deloitte and finance director at Singer & Friedlander, died aged 68 on 12th October 2017. He left behind his second wife, Pamela Shearer (‘Pamela’) and two adult daughters from his first marriage, Juliet Miles (‘Juliet’) (40) and Lauretta Shearer (‘Lauretta’) (39).
In his will, dated 2nd February 2015, Tony left nothing to Juliet and Lauretta, instead leaving the bulk of his £2.2 million estate to Pamela and appointing her as executrix. The two daughters launched 1975 Act claims against their father’s estate for reasonable financial provision to be made for them under s.1(c) Inheritance (Provision for Family and Dependents) Act 1975 (the ‘1975 Act’) as ‘children of the deceased’ on the basis of their present financial difficulties and that their father has always provided for them, despite a breakdown in relations following his marriage to Pamela.
The Legal Position
According to the 1975 Act, spouses/civil partners, children and other individuals who were being maintained by the deceased are able to apply to the court for reasonable financial provision where they are able to demonstrate that the will and/or the laws of intestacy failed to provide for them. While spouses/civil partners are able to claim what they might have expected to receive upon divorce, children can only claim financial provision in the form of ‘maintenance’ that is reasonable in the circumstances.
When assessing the merits of such an application, the court shall consider the factors set out in s.3(1) of the 1975 Act:
a) the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;
b) the financial resources and financial needs which any other applicant for a 1975 Act claim has or is likely to have in the foreseeable future;
c) the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;
d) any obligations and responsibilities which the deceased had towards any applicant or any beneficiary of the estate of the deceased;
e) the size and nature of the net estate of the deceased;
f) any physical or mental disability of any applicant or beneficiary of the estate of the deceased;
g) any other matter, including the conduct of the applicant or any other person which the court may consider relevant.
The daughters, who had jokingly referred to their father as ‘the chequebook’ during his life, tried to demonstrate their financial needs as follows. Juliet argued she needed money to fund her housing and training as a dog behaviourist. At the time of the trial, she had recently divorced her second husband and was living with her mother, the deceased’s first wife Jennifer Shearer (‘Jennifer’). Juliet’s claim also included maintenance to supplement a shortfall in her income of £16,000 per year to provide for her younger daughter who was severely autistic.
Lauretta’s financial needs were twofold. First, she wanted to be able to convert her interest only mortgage into a repayment mortgage so she would not be forced to sell her home on retirement. Second, she wanted a sum of money from her father’s estate to be able to buy out her ex-husband’s 11% share of the property for £150,000.
Sir Julian Flaux, the Chancellor of the High Court, concluded that neither daughter had demonstrated a need for financial maintenance. He held that Jennifer should be able to support her daughter Juliet, who was living with her, and provide the capital she needed to purchase a property of her own, as Jennifer had admitted in cross-examination. Juliet would also be able to earn roughly £15,000 per year as a dog trainer and behaviourist to make up for the shortfall in income to provide for her autistic daughter. The disability of a grandchild of the deceased or a dependent of an applicant is not a factor that is taken into account in s.3(1) 1975 Act, therefore the court only took this disability into account in relation to the diminished earning capacity of Juliet.
Further, the judge found that Juliet had been willing to occupy a more modest home/tolerate a more modest standard of living while married to her ex-husband Keith Miles, who was an army officer in Ministry of Defence accommodation. Therefore, any assessment of her financial needs should be carried out by reference to that modest standard of living, rather than the comfortable life she had been living in Jennifer’s home – a detached house in Wiltshire with extensive grounds and a swimming pool.
The judge held that Lauretta might not have been able to afford the property she was living in currently, but she received a good salary of £70,000 and would be able to move to a more affordable property in the same area of London on that salary. Sir Julian Flaux concluded that Lauretta’s desire to convert her mortgage into a repayment mortgage did not constitute a need for maintenance from her father’s estate. The judge also found that Lauretta had not relied on an expectation of inheritance when she purchased the property with her ex-husband, so she did not need a lump sum from her father’s estate to buy out her ex-husband’s share of the property.
The judge stated that the father had no legal obligation to provide for his adult children and they had no expectation of financial benefit from him at the time of his death. Of particular importance, the deceased had made generous gifts to his two daughters in 2008, giving £177,000 to Juliet and £185,000 to Lauretta. The court accepted Pamela’s argument that these gifts represented the last financial contribution that her late husband Tony intended to provide his daughters with. Therefore, both Juliet and Lauretta’s 1975 Act claims were dismissed.
The daughters have been given leave to appeal the High Court’s decision, so this might not be the last we hear on Miles v Shearer.
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