Claims Under Inheritance for Provision

Claims Under Inheritance (Provision for Family and Dependants) Ordinance Cap. 481

 A person may apply to the court for an order under section 4 of the Ordinance on the ground that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant.

Section 3(3) provides that “a person shall be treated as being maintained by the deceased, either wholly or substantially, as the case may be, if the deceased, otherwise than for full valuable consideration, was making a substantial contribution in money or money’s worth towards the reasonable needs of that person.”

The court can make any one or more of the following orders under section 4(1):

(a) periodical payments and for such term as may be specified in the order;
(b) a lump sum of such amount as may be so specified;
(c) transfer to the applicant of such property comprised in that estate as may be so specified;
(d) settlement for the benefit of the applicant of such property comprised in that estate as may be so specified; and
(e) an order for the acquisition out of the property comprised in that estate of such property as may be so specified and for the transfer of the property so acquired to the applicant or for the settlement thereof for his benefit.

According to section 5 of the Ordinance, on determining both whether the will has made reasonable financial provision for the claimant and whether and to what extent the court should exercise its power, the court shall have regard to the following matters:-

(a) the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;

(b) the financial resources and financial needs which any other applicant for an order under section 4 has or is likely to have in the foreseeable future;

(c) the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;

(d) any obligations and responsibilities which the deceased had towards any applicant for an order under section 4 or towards any beneficiary of the estate of the deceased;

(e) the size and nature of the net estate of the deceased;

(f) any physical or mental disability of any applicant for an order under section 4 or any beneficiary of the estate of the deceased;

(g) any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.

On deciding any claim by the person, the Court shall, in addition to the matters specifically mentioned in (a) to (f) above, have regard to-

(a) the age of the Wife and the duration of the marriage;

(b) the contribution made by the Wife to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family, and the court shall also, unless at the date of death a decree of judicial separation was in force and the separation was continuing, have regard to the provision which the Wife might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce.”

Section 5(2) of the IPFDO then sets out the so called “divorce standard”, while section 3(2)(a) of the IPFDO sets out the so called “surviving spouse standard”.  The Wife may be entitled to a reasonable financial provision over and above that which is required for her maintenance.

Re Estate of CNC [2011] 4 HKLRD 544

On the issue of “divorce standard”, Deputy Judge S. Lo has made the following observations in this case:

“I consider that divorce standard must be one of very important consideration, to which the court should have due regard. On one hand, due to different provisions in the two Ordinances, the guidelines laid down in LKW’s case which approves White v White in dealing with s.7 of the Matrimonial Proceedings and Property Ordinance cannot be mechanically transplanted to the spouse’s claims under the IO. On the other hand, the principle against discrimination, in my judgment, is equally applicable to such claim. With the objective of achieving a fair and non-discriminatory result, the court shall treat the divorce standard as a statutory cross-check so as to decide what reasonable financial provision shall be ordered to the spouse under the IO. I have to remind myself that there is no presumption of equal division of assets, but as a general guide, equality should be departed from only if there is good reason for doing so. In my view, the value of the net estate is also very important.”