When making a will, the general rule is that the testator has a right to be free to give his or her property away as he or she thinks fit. However, this right is curtailed by the Administration and Probate Act 1958 (Act), which gives power to the Court to make a Testator’s Family Maintenance (TFM) order. A TFM order results in provision being made out of the testator’s estate to make ‘adequate provision for the proper maintenance and support’ of the claimant.
A claimant may make a TFM application within six months of probate or letters of administration being granted. If a trustee of an estate makes a distribution within this time, the trustee may be held personally liable for a later successful claim. In limited circumstances, the Court may grant an extension in time for a claimant to make a TFM application (also see article below).
The Court approaches TFM applications as a three step process. The first step is for the Court to deter-mine whether the deceased had responsibility to make provision for a person. The second step is to deter-mine whether or not the distribution of the estate of the deceased makes adequate provision for the proper maintenance and support of the claimant. The third and final step is determination of the amount of the provision which the Court should order for the claimant.
Some of the important considerations to which a Court will have regard are:
i. the relationship between the deceased person and the claimant, including the nature of the relation-ship and, where relevant, its duration;
ii. the size and nature of the estate of the deceased person;
iii. the financial position (including earning capacity) and the financial needs of the claimant for the fore-seeable future;
iv. the physical and mental health of the claimant;
v. the age of the claimant; and
vi. whether the deceased gave any gifts to the claimant during his or her life.
In addition to the above considerations, the Court may have regard to any other matter it considers relevant. For example, the claimant’s poor conduct, or the estrangement of the claimant from the deceased, may disentitle the claimant having a TFM order made in his or her favour. Generally, the Court will be bound to make a TFM order where a ‘wise and just testator’ would have thought there was a ‘moral duty’ to make provision for the claimant, had the testator been fully aware of all the relevant circumstances.
A person looking to minimise the risk of a TFM claim being made on the estate should have regard to the above power of the Court to make TFM orders. The testator should identify all possible claimants, in addition to the express beneficiaries under a will, and discuss the possibility of the will being challenged by a TFM claim. Identifying such risks, then taking steps to mitigate those risks, is the best way to produce a strong will.
Hicks Oakley Chessell Williams