Inh. Fam. PRV (Part-3)

Inheritance Family Provision (Part-3)
Orders which the court may make (s 2(1))
Periodical payments
 An order of this nature may entail:

 payments of specified amounts at periodic intervals (eg £100 per month to be
paid to A);
 payments equal to the whole or a specified part of the income of the net estate
of the deceased (eg the income from one-third of the net estate to be paid to A);
 payments equal to the whole income of such part of the net estate as the court
directs to be set aside or appropriated (eg the court may order £10,000 to be set
aside and invested and the income produced to be paid to A).
 in the alternative, the court may direct the periodical payments to be
determined in any other manner it sees fit.
 The order will normally state the duration for which the payments are to run. This
may be a fixed number of years; for the rest of A’s life; or until A attains majority,
marries or re-marries, as appropriate. In the case of judicially separated/former
spouses, s 19(2) provides that an order for periodical payments automatically
terminates on re-marriage.
Variation and discharge of periodical payment orders
 Applications to vary, discharge, suspend or revive a suspended periodical payment

order may be made by any of the following parties:
 A, for whose benefit the order was made or any other person who has applied
or would be entitled to apply for an order but for the time limit in s 4;
 D’s personal representatives;
 the trustee of any property which is subject to the periodical payment order; or
 any beneficiary under the deceased’s will or intestacy.
Lump sum payments
 The court may order a once and for all lump sum to be paid to A out of D’s net
estate. Once a lump sum payment has been ordered, A cannot return to court for
any other relief. Hence, it was signified in Re Besterman that in fixing the lump
sum, the court must take due account of the effects of inflation and other
contingencies that might affect A’s circumstances.
 The court may order the lump sum to be paid to A in instalments. Where this is the
case, the court may subsequently vary the number of instalments payable and the
dates on which they are to be paid, but not the amount of the lump sum.
Transfer of property
 The personal representatives may be ordered to transfer any property forming part
of the deceased’s net estate to A. This is usually favoured in cases where ordering
a lump sum payment would entail an unnecessary sale of assets comprised in the
estate.
Settlement of property
 The court is also empowered to order the settlement of any property forming part
of the deceased’s net estate for the benefit of A. In this event, the property will not
be transferred to A himself, but to trustees on his behalf. This order is especially
appropriate where, by reason of infancy or some other reason, A is incapable of
managing his own affairs.
Acquisition of property for transfer or settlement
 The court may order specified property to be paid for out of the deceased’s net
estate and either transferred to or settled on trust for A.
Variation of marriage settlement
 The court may make an order varying any ante-nuptial or postnuptial settlement
made in connection with the marriage of D. The variation can only be ordered if
A, for whose benefit it is made, is the surviving spouse of that marriage, a child of
the marriage, or any person who was treated as a child of the family in relation to
the marriage.
The effect of an order
 Where an order is made under the Act, the effect of this is that for all purposes,
D’s will or the law governing the devolution of D’s property on intestacy are
deemed to operate subject to the terms of the order. Consequently, A, in whose
favour the order was made, is treated as the equivalent of a beneficiary under a
will or intestacy.
 In making the order, the court may require any person holding any property which
forms part of the deceased’s estate to make such payment or transfer such property
as is necessary to fulfil the terms of the order, whether that person holds the
property as a personal representative or in any other capacity.
 The court may make an order expressly varying the terms of D’s will or the
operation of the intestacy rules in whatever manner it thinks is fair and just. For
example, if the court makes an order transferring a house forming part of D’s
estate to A and the property in question was specifically left to a named devisee in
D’s will, the court may at the same time vary the terms of the will with a view to
making some other provision for that devisee.
Interim orders
 Under s 5 of the Act, the court may make an interim order in A’s favour. The need
for such orders stems from the fact that a full hearing of the application may take a
fairly long time and in the meantime A, having been dependent on D when D was
alive, may be in financial difficulty.
 Two conditions must be established before an interim order will be granted:
 A must be in immediate need of financial assistance;
 there must be property forming part of D’s net estate which is available to meet
this need.
 When a final order is eventually made after a full hearing, it is open to the court to
direct that whatever A received under the interim order be brought into account
against the amount awarded to A under the final order.
The deceased’s ‘net estate’
 When a court makes any order for financial provision under the Act, this must
come out of D’s net estate. Section 25 identifies various categories of property
which fall within the net estate, namely:
Property always included in the net estate
 All property which D has power to dispose of by his will (other than by virtue of a
special power of appointment), less whatever amount may be needed for:
(i) funeral, testamentary and administration expenses;
(ii) the payment of the deceased’s debts and liabilities; and
(iii) the payment of inheritance tax

 Any property in respect of which D held a general power of appointment
exercisable by deed which was not exercised in his lifetime. If the power was
exercisable by will, it falls within the first category.
 Any sum of money or other property covered by s 8, namely:
 money or property which is the subject of a statutory nomination made by
D in favour of any person; or
 D’s money or property which was given to any person under a donatio
mortis causa.
Property included in the net estate if the court so orders
 The court may, by virtue of s 9, order D’s severable share of any property of
which he was a beneficial joint tenant at his death to be treated as part of his net
estate. For example, if D and another person, X, were beneficial joint tenants of a
house or a chose in action (eg money in a joint bank account) immediately before
D’s death, X becomes entitled to the property under the right of survivorship. The
court may, however, order that D’s sever able share of the property shall be treated
as part of his net estate to such extent as appears just in the circumstances (see, eg
Jessop v Jessop (1992) and Powell v Osbourne (1993)).
 Under s 10, the court may set aside a disposition of property made by D less than
six years before his death in favour of a person who did not give full valuable
consideration, if it appears that the disposition was intended to defeat possible
applications for financial provision under the Act.
 Again, under s 11, the court may set aside a contract made by D in which he
agreed to leave a sum of money or other property (or agreed that a sum of money
or other property would be paid or transferred out of his estate) to a person who
did not give full valuable consideration, if the court concludes that the contract
was made to defeat possible applications under the Act.
 Where a disposition or contract is set aside on these grounds, the court may order
that the property or sum of money to which it relates is to form part of D’s estate
for the purpose of satisfying any provision to which A is entitled under the Act.

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Inheritance Family Provision (Part-3)

Orders which the court may make (s 2(1))

 An order of this nature may entail:

Variation and discharge of periodical payment orders

 Applications to vary, discharge, suspend or revive a suspended periodical payment

Lump sum payments

Acquisition of property for transfer or settlement

Variation of marriage settlement

The effect of an order

The deceased’s ‘net estate’

Property always included in the net estate

(i) funeral, testamentary and administration expenses;

(ii) the payment of the deceased’s debts and liabilities; and

(iii) the payment of inheritance tax

Property included in the net estate if the court so orders

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