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Movement in cohabitation claims – recognition of financial dependence

By 30 May 2018News

The law on cohabitation and inheritance has come under scrutiny again as the High Court has ruled in favour of a woman who was neither married to, nor in joint property ownership with, her late partner and who initially received nothing from his £1.5 million estate after his death. In a ruling handed down on 29 March this year, the High Court ruled in favour of 79-year-old Joan Thompson who, it said, should be entitled to a distribution of her late partner, Wynford Hodge’s estate.

In Thompson v Raggett, Joan Thompson pursued a claim under the Inheritance (Provision for Family and Dependants) Act 1975 against Hodge in the Chancery Division of the High Court. He had left his whole estate, valued at £1,535,060, to tenants and friends. The couple had been together for 42 years.

In his Will, Mr Hodge claimed that he did not trust Mrs Thompson’s children and did not think she would be able to live independently after his death due to her poor health. He stated, “I am Joan’s main carer and envisage she may have to go into a [nursing] home following my death. I confirm Joan has her own finances and is financially comfortable. Joan has her own money and her own savings. However, it emerged that Joan had been financially dependent on him during their decades together, and in fact only had meagre savings. She was therefore left in financial difficulty, reliant on a state pension and disability benefits.

His Honour Judge Jarman QC ordered that Mrs Thompson should be given reasonable provision for her maintenance. She was granted one of Hodge’s properties worth £225,000 as the court heard the property had been purchased with a view to the couple retiring to it. Thompson was also granted £160,000 for her future maintenance and care, and £28,845 to renovate the property.

The judge explained that the rationale for the outcome was based on the length of their relationship, on Mrs Thompson’s financial dependency on Mr Hodge and on the need for a provision to prevent her having to ask the intended beneficiaries for permission to renovate the property, or raise capital against it. The judgment paves the way for cohabitees, who currently have no statutory rights to their partner’s estate, to secure financial provision that reflects their contribution to the relationship. The judge explained, “As Mr Hodge and Mrs Thompson grew older each had health issues which needed care, and each relied on the other to provide care. Mrs Thompson had a serious stroke about 12 years ago and has had heart attacks since. She accepts that in the last few years that she needed more care than he did. However, she helped him whenever she could, for example by helping him dress, wash and shave after a hip replacement some years ago.

The Judge went on to explain Mr Hodge’s stated intentions,, “In December [2016] he was admitted to hospital. During Mrs Thompson’s visits he told her not to worry as she would be well looked after. It was not long after discharge that he was admitted again for a burst cyst which led to his death.” At the time of his death, Mr Hodge was in his 90s. Counsel for the tenants who had been made beneficiaries of the Will eventually conceded that the Will had, in fact, not made reasonable provision for Mrs Thompson.

What is interesting in this case is that courts will often consider the provision of accommodation by way of a life interest, rather than a capital transfer, as this has the joint benefit of also reinforcing the principle of testamentary freedom – the freedom to dispose of one’s assets as one sees feet. This case is particularly noteworthy as the judge recognised the general provision to prioritise life interest over a capital transfer is not an absolute rule and decided to depart from it by providing an outright transfer of the cottage to Mrs Thompson rather than just a life interest.

At Cambridge Family Law Practice, we fully support calls for the government to overhaul cohabitation law and to do away with the many unfair outcomes that the current system generates. In the meantime, we watch with interest as judges balance the shifting challenges of a changing society within the constraints of the current legal framework and we anticipate more newspaper headlines in this area.

If you have any questions about cohabitation law and its application to your situation, or any other family law questions, you can call us on 01223 443333 and make an appointment to speak to Simon, Adam, Tricia, Sue or Gail.