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Inheritance claims – interim payments

When can the court exercise its statutory power to award interim payments to a claimant under the Inheritance Act? This issue rarely comes before the court and the author of this article highlights the court’s approach to the issue, and practical points of note that emerge from it.
 
Under s5 I(PFD)A 1975, the court has power to award interim payments at intervals it thinks reasonable if the applicant has ‘immediate need of financial assistance, but it is not yet possible to determine what order (if any) should be made under that section’, and if property forming part of the net estate is or can be made available to meet those needs. The value of the estate was not mentioned in the ruling. 
 
The ruling, says the author, shows that a claimant has a high threshold to cross in order to succeed in securing interim payments. C had been financially dependent on the deceased. She had already received a large sum (£196,000) from a SIPP in D’s name but most had been spent. She brought an inheritance claim against the estate which the defendants disputed. 
 
C applied for interim provision essentially to cover the costs of legal fees incurred during the course of her claim, though she accepted she would have little prospect of repaying any interim provision if her substantive claim failed at trial.
 
Lieven J said there were two requirements to be met by the claimant: she must be in immediate need of financial assistance; and there must be consideration of whether her substantive claim had sufficient merit to justify an interim order. The application was refused for reasons that include:  
  • C’s evidence was far from sufficiently clear or comprehensive on this matter.
  • Her (fourth) witness statement gave little detail of how a large part of the SIPP money had been spent.
  • In that witness statement, her evidence on financial need was limited, and she did not produce any bank statements or supporting evidence of how that money has been spent or any breakdown of the legal fees she has already spent or owed in the future.
  • In her witness statement, she detailed the sums of money she had already spent, such as £52,000 on legal fees; certain charitable donations and support for individuals in Ghana, but there was no detail, documentary evidence or clarity about these payments including why the estate should pay it and not C herself.
  • Given the impact of a s5 order, particularly where repayment is unlikely, a claimant would have to show they had at least a strong arguable case.
Lieven J concluded it would be wrong to make an order under s5 for such a large sum where there is no security or much likelihood of repayment. To make an order would effectively be prejudging a part of the s1 issue which would not be right. 
 
The author says the courts will subject applications for interim payments to careful scrutiny. Particular care must be taken in preparing the applicant’s evidence of financial need. She concludes that such applications should only be contemplated in cases where eligibility is conceded or the claimant’s position on that point is particularly strong, and an immediate need can be demonstrated. T v V [2019] EWHC 214. Source: www.equitysdarling.co.uk.
 

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