Widow’s Reasonable Financial Provision Claim Rejected

It’s not uncommon for marriages to break down after many years together. Sometimes, couples separate but remain formally married. However, in the context of ‘reasonable financial provision’ and a Will, what happens if a couple is in the throes of divorce when one dies?

Ramus v Holt & Ors (Re Estate of Christopher Stewart Ramus) [2022]

In this recent case, the claimant, Elizabeth Ramus, was eligible under the Inheritance (Provision for Family and Dependants Act) 1975 (1975 Act) at the time of her husband’s death.

However, the Court rejected her claim for additional provision even though the provision in her husband’s Will was controlled by Trustees who potentially didn’t have her best interests at heart due to family disagreement.

Background Details

During their 48 years together, Elizabeth and Christopher Ramus had two children, Claire Holt and Alistair Ramus, and had built a very successful seafood business in Harrogate. Married life was reasonably happy but not without difficulty. It seems that Christopher had a fraught relationship with both children, whilst Elizabeth was not on good terms with their daughter Claire.

Tragically, in 2020, after Elizabeth began divorce proceedings the previous year and were living separately, Christopher Ramus died by suicide.

Christopher Ramus’ Will

Christopher’s last Will was made in April 2014. He added three separate codicils in 2015, 2017, and 2019, appointing his daughter Claire Holt and long-time friend and advisor, Mr. Wardle, as Trustees.

The 2014 Will left Christopher’s residuary estate in a Discretionary Trust for Elizabeth (and other discretionary beneficiaries), where she had a life interest. This meant that Elizabeth was entitled to receive income from the Trust for life. However, the Trustees had the power to decide how much (and when) Elizabeth and other beneficiaries would receive a payment.

Furthermore, when adding the last codicil in 2019, Christopher also signed a Letter of Wishes alluding to their “uncertain” matrimonial circumstances, urging the Trustees to make sure his wife could maintain her current lifestyle, but if “If her own resources are such that she does not require that income”, or she remarried, then they should consider removing “her right to income in all or part of the Trust Fund”.

The grant of probate was issued in late 2020, confirming Christopher’s net estate value at just over £1m. The trustees agreed that the monies held in the Trust should be invested and the income paid to Elizabeth in line with her husband’s Will.

Elizabeth Ramus’ Claim

However, Elizabeth Ramus was concerned that due to her complicated relationship with her daughter Claire Holt and the fact that the other two Trustees were close friends of her husband, the Trustees would exercise their right to refuse a capital advance or even terminate payments from the Trust altogether.

So, she issued proceedings under section 1(1) of the 1975 Act, claiming that her husband had not made “reasonable financial provision” in his Will.

Elizabeth had over £1,500,000 in cash and investments and received an income of approximately £1,700 per month; her monthly expenditure was above £5,000. So, to meet her monthly expenditure, Elizabeth relied on her capital.

She asked the Court to:

Amend the terms of the Discretionary Trust that effectively allowed the Trustees to stop her income
Award her a minimum fixed sum from the Trust each month (to increase with inflation)
to replace the Trustees with new ones, agreed between the parties or appointed by the Court

Judgment

Under the 1975 Act, the Court considered the following:

Her current and future financial needs and resources
Other beneficiaries’ needs and resources
Christopher’s obligations to other individuals
Christopher’s net estate
Physical or mental disabilities of anyone involved
Any other relevant matter, including how those involved acted

The Court rejected Elizabeth’s claim, ruling that Christopher had made reasonable provision in his Wil. In their opinion, substantially over what Elizabeth might have received on a Duxbury basis (a method used to work out a lump sum drawn by a partner as maintenance for the rest of their life).

Furthermore, presiding Judge West pointed out that the Trustees could terminate Elizabeth’s life interest if all agreed. And Elizabeth’s request for the Trustees to be replaced was irrelevant because “reasonable financial provision from the estate of the deceased does not become unreasonable financial provision because of the identity of the trustees”.

Our Advice

Undoubtedly, as this case shows, in certain circumstances, a discretionary trust can offer reasonable financial provision for a surviving spouse, even when Trustees have the power to refuse payment to a beneficiary. However, each case is different and is judged on its merits. If Elizabeth Ramus had not been financially self-sufficient, the outcome of this case might well have been different.

This case also highlights the critical role Trustees play. Family frictions are likely to emerge when Trustees can exercise discretion. Appointing independent, professional Trustees can help. They make decisions objectively, avoiding unnecessary delays and family tension.

If you’d like to discuss any of the issues raised here or need help drawing up your Will or planning your estate, please contact us. We’re here to help.

Please note that all views, comments or opinions expressed are for information only and do not constitute and should not be interpreted as being comprehensive or as giving legal advice. No one should seek to rely or act upon, or refrain from acting upon, the views, comments or opinions expressed herein without first obtaining specialist, professional or independent advice. While every effort has been made to ensure accuracy, Curtis Parkinson cannot be held liable for any errors, omissions or inaccuracies.