When a couple’s relationship broke up, it was unlikely that either of them would have foreseen an argument over who should inherit the proceeds of a life assurance policy that would subsequently lead to an appearance in the Court of Appeal.

The circumstances were that the couple married in 2003 but split up a few years later, having had a daughter. The wife left the UK and moved to the Philippines, where she formed a relationship with another man with whom she had a son. The wife died in 2011, shortly after being diagnosed with an incurable illness. Proceedings for divorce had been started by her former husband by that time.

Prior to their marriage, the two had taken out a joint life assurance policy, each naming the other as the beneficiary of the policy. This was worth £113,000. On the wife’s death, the proceeds of the policy were paid to her husband.

However, the policy provisions allowed the policy owner to receive the proceeds of the life assurance before death if he or she were diagnosed with a terminal illness.

The woman’s son claimed against her estate under the Inheritance (Provision for Family and Dependants) Act 1975, which provides that the dependants of someone who dies may, in appropriate circumstances, claim against their estate if the deceased person’s will makes insufficient provision for them.

The question before the Court was whether the woman had been beneficially entitled to her share of the value of the life assurance policy before her death and therefore whether her estate should receive it, in which case the policy proceeds would be available to meet her son’s claim.

The arguments were complex, but the Court, in a majority decision, ruled that the policy proceeds belonged to the husband and were not, therefore, part of his late wife’s estate.


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