The UK court of appeal has ruled that trustees cannot reject a beneficiary’s claim to receive reasonable financial provisions.
In Cowan v Foreman, Mrs Cowan was the main recipient of her late husband’s estate which, when he died, was put almost entirely in trusts with a default to a charitable foundation.
But the trust structure left the widow, who lives in California, dependent on the UK-based trustees to pay her living expenses, as well as any uninsured medical costs.
In November 2017, they questioned some medical expenses that she submitted.
Following this, she gave notice that she would bring a claim for reasonable financial provision.
Since then, however, over six months passed and, under UK law, the claim then needs to be approved by a court.
The two parties agreed to a ‘standstill’ to buy more time to settle the dispute, followed by around a year of negotiations.
As the mediation failed, Cowan issued her claim.
Legal intervention
But, as the case went to court in October 2018, both the Will and charitable foundation trustees said they objected as too much time had passed.
The high court judge ruled against Cowan as she was bound to fail and her delay in bringing the claim was “not excusable”.
Cowan, however, appealed the decision.
The court of appeal completely overturned the high court’s ruling, criticising the approach to the case, and granting Cowan access to her husband’s estate.
“I am delighted that the court of appeal has recognised my right to be free from the control of others,” Cowan said.
“Michael and I were together for 25 years. He would have been horrified to find those he chose as trustees demanding receipts for my needs.”
Wider implications
But what does this case mean for the inheritance landscape?
Paul Hewitt, partner at law firm Withers who was also involved in the Cowan case, told International Adviser: “The court of appeal has comprehensively rejected the idea that leaving a widow at the mercy of trustees (who are on the other side of the world) is a reasonable approach.
Claims against an estate that are made more than six months after probate was granted require the court’s permission to proceed.
“The Inheritance (Provision for Family and Dependants) Act 1975 permits certain categories of individuals (such as spouses, civil partners, cohabitees, children and dependants) to seek provision from an estate.
“This judgment will assist a claimant who seeks permission to bring a claim outside the six-month period and adds to a growing weight of case law permitting dependants to make a delayed claim.
“Surviving spouses seeking outright provision, instead of interests in trusts, will be encouraged that the court of appeal referred to the importance of financial autonomy.”
