Undoubtedly, the death of a loved one is one of the most difficult experiences people will ever have to go through in their life. The last thing their family would want to think about at such a time is money, but unfortunately, this is often a necessary evil.
Therefore, people need different types of insurance during their life; one of them being life insurance. Life insurance pays out a sum of money to the policyholder’s loved ones when they die. This can help cover funeral costs, pay off debts or simply provide financial security for their family.
However, there are situations where the death benefit from a life insurance policy is not enough to cover the costs of raising a family. Here, early distribution insurance can provide some much-needed financial assistance.
But what happens if you die without having this type of insurance in place?
What is the Inheritance (Provision for Family and Dependents) Act 1975?
This act was put in place to protect the financial interests of certain family members and dependents following the death of the person responsible for earning the household income. It gives these people the right to claim the estate if they feel that they have not been adequately provided for.
This act applies to the estates of people who died on or after January 1975, regardless of whether they were residents in England and Wales at the time of their death.
What is the purpose of the act?
1. Reasonable Financial Provision
The purpose of the Inheritance (Provision for Family and Dependents) Act 1975 is to provide financial security for the family of the deceased by giving certain family members and dependents the right to claim the estate if they feel that they have not been adequately provided for.
According to this act section (I), a person may make a claim for provision from the estate of a deceased person if that person is:
a) Inheritance by the deceased’s spouse or civil partner.
b) An ex-spouse or civil partner who has not remarried or entered into a new civil partnership after the death of the deceased;
c) In the case of a child, the deceased’s minor child;
(d) An individual considered as a family member by the deceased;
e) It may also be a grandchild of the deceased;
f) If the deceased was maintaining a person before his death, this person will be regarded as being maintained by the deceased.
And this section proves that section (I) if you belong to any of the above-mentioned categories then you have a right to make a claim. And this claim will give you the benefit of the property or money of the deceased which you think you deserve and have been deprived of.
2. Limited Power to Disinherit
This means that a person cannot use their will to completely exclude certain family members from their estate.
Under this act, a person may only disinherit their spouse or civil partner if there are grounds for doing so, such as adultery or desertion. And even then, the court has the power to override this and make an order for financial provision from the estate.
The court also has the power to override any provisions in a will if it feels that they are not reasonable in the circumstances. This means that a person cannot use their will to completely exclude certain family members from their estate.
3. Protection for Unmarried Couples
While this act does not give these couples the same rights as married couples, it does give them some limited protections.
For example, if an unmarried couple has been living together for more than two years and one of them dies, the surviving partner has the right to make a claim on the estate for financial provision.
4. Protection for Children
Under this act, a child has the right to claim the estate of a deceased parent if they feel that they have not been adequately provided for. This includes both financial and non-financial provisions.
When it comes to fair financial provision for the children, the court will consider what is known as Section 3 elements, according to which the court will see the financial needs, obligations, and responsibilities of the child.
And if it is satisfied that the provisions in the will are not fair to the child, it can make an order for financial provision from the estate.
5. Equal Treatment for Men and Women
This includes both married and unmarried couples. Under this act, a man and a woman have the same rights to claim the estate of a deceased partner. This includes both financial and non-financial provisions.
Conclusion
The Inheritance (Provision for Family and Dependents) Act 1975 is an important piece of legislation and although it may seem like a daunting process, understanding the provisions of this act can help you ensure your loved ones are taken care of even after your death.
If you are considering making a will, it is important to understand how the Act can impact your estate planning. Moreover, if you are an executor of a will, it is important to be aware of the rights of family members and dependents so that you can ensure that they are treated fairly.
