Observations on recent inheritance dispute case law Re Annan (Deceased)  EWHC 662 (Ch)
This case concerned the estate of George Annan who died on 6 January 2021. The claim involved George’s three children, two Inheritance Act 1975 claims, one dismissed, the other resulting in a discretionary trust award.
George left behind three adult children Wayne 58, Russell 59, and Heather 61. His estate included a house worth £220,000 and £255,743 in various accounts. The will made in 2013 gave £10,000 to each of the three children and the residue to George’s wife but if she predeceased him (as happened) to Heather.
The judge considered the s. 3 factors in the Inheritance Provision for Family & Dependants Act 1975.
Ultimately the cross examination of Wayne on his existing financial needs and resources led the judge to reject his claim. The judge determined that, in the circumstances of this case repayments towards a bounceback loan [§42] and the voluntary increased repayment of mortgage(s) to reduce capital owed [§45] (Wayne owns two rental properties in addition to his matrimonial home) did not amount to necessary for his current maintenance.
Additionally, the needs identified by Wayne in his claim included those of his family household and the Judge concluded it appropriate to consider the income of others in the household [§49] (Wayne had argued that his wife did not contribute to the household bills).
“50. I consider that as an adult child approaching 60, who owns his own profitable business (albeit that those profits are currently less than usual because of the difficult economic circumstances), who owns his own home and two other properties (in which the total equity is in the region of £240,000) and who is currently earning in excess of £30,000 (before taking into account his wife’s additional income of £6,000 per year), Wayne is able to meet his own reasonable financial needs, both now and in the foreseeable future.”
It was a different outcome for the claim brought by Russell taking into account that his situation is very different. Russell has no employment, no property and is chronically disabled, suffering from Crohn’s disease, anxiety, and spondylitis and dependent on help for many ordinary daily tasks. The judge found that whilst Russell’s reasonable financial needs are currently met by his, admittedly low, income. Considering his disabilities, he is unlikely to be able to cover care costs as will arise in the foreseeable future as his medical condition worsens.
“99. In these circumstances, arriving at an appropriate figure is far from an exact science, and while I do not accept the reason given by Russell to justify provision in the sum of £25,000, I consider that is the appropriate sum to order (over and above the £10,000 gift already made by the will), so as to make reasonable financial provision for Russell in light of his disabilities”.
As Russell is in receipt of state benefits and was formerly addicted to gambling the judge ordered that the modest additional £25,000 should be settled in a discretionary trust [§100].
Heather successfully defended the claim by Wayne, but did see her inheritance reduced by the increased provision made for Russell. It is not reported how the question of legal costs was determined. That aspect will be significantly impacted by any settlement offers the parties made before the trial.