Ten year inheritance dispute to be determined in UK Supreme Court
A recent case, which has been given the green light to proceed to the Supreme Court, has sparked much debate around its potentially corrosive effect on testamentary freedom. Background to the case is covered in detail below, but if you are thinking of leaving any of your children out of your Will, we would recommend the following:
- Explain your reasons clearly in your letter of wishes
- Append to that letter any supportive evidence such as a witness statement
- Explain in that letter your reasons for benefiting specific charities or other beneficiaries.
Ilott v Mitson
On 1 March 2016, the Supreme Court granted permission to the Blue Cross, RSPB and RSPCA to appeal the Court of Appeal’s decision in Ilott v Mitson to award the appellant under the Inheritance (Provision for Family and Dependants) Act 1975 against the provisions of her mother’s Will.
We await the Supreme Court’s decision with interest and will provide further guidance at the relevant time.
The 1975 Act
In contrast to many European countries, individuals in the UK are free to benefit whomever they wish in their Will. On the testator’s death, a spouse/civil partner or child of the deceased, or an individual wholly or partly maintained by the deceased, may bring a claim under the 1975 Act if the Will does not make “reasonable financial provision” for them. For those who are not a spouse or civil partner of the deceased, claims are limited to provision for maintenance (the reasonable cost of everyday living). The courts have generally upheld the doctrine of testamentary freedom and dismissed 1975 Act claims brought by able-bodied adult children. The conclusion of Ilott v Mitson could signal a shift in the court’s approach.
Background to the case
In this case, Melita Jackson instructed solicitors to omit her daughter Heather Ilott from her Will after falling out and a 26-year period of estrangement. Mrs Jackson died in 2004 leaving a net estate worth £486,000. She left a £5,000 pecuniary legacy to BBC Benevolent Fund and the residue of her estate equally to three animal charities. Two professionally drafted letters of wishes accompanied her Will which explained why she decided not to benefit her daughter and asked her executors to defend any claim her daughter might bring. Heather was married with five children and lived with her husband on a modest income supplemented by state benefits. Heather was physically and mentally capable of working but chose not to work in order to look after her children. Mrs Jackson did not financially support Heather once they became estranged and Heather did not expect to be included in her mother’s Will.
On Mrs Jackson’s death, Heather brought a claim against her mother’s estate under the 1975 Act seeking sufficient funds to buy her council house amongst other payments. At first instance in 2007, the district judge found that Mrs Jackson’s failure to provide for her daughter was unreasonable in view of her straitened financial circumstances and awarded her £50,000. In determining quantum, the judge balanced Heather’s meagre finances against her lack of expectancy to benefit from her mother’s Will and her ability to live within her means.
Heather appealed the size of the award on the grounds that it would deprive her of state benefits that were partly means-tested and the funds to buy her council house. The charities cross-appealed. The Court of Appeal allowed Heather’s appeal and remitted the case to the High Court. The High Court overturned Heather’s appeal holding that Mrs Jackson was entitled not to provide for her estranged adult daughter in her Will.
On a further appeal, the Court of Appeal held that the Will did not make reasonable financial provision for Heather and, in 2015, granted Heather a higher award of £143,000 to purchase her council house plus the reasonable expenses incurred during the purchase and up to £20,000 structured so as to allow her to retain her state benefits. The court decided that Heather’s income was so low as to outweigh the requirement under the 1975 Act for the claimant to depend financially on the deceased. The court took into account that the charities did not need the funds and Mrs Jackson had no obvious connection with the charities.
The three charities have recently obtained permission to appeal the decision in the Supreme Court. The Supreme Court will need to decide whether the Court of Appeal:
- was wrong to set aside the £50,000 awarded at first instance
- erred in its approach to maintenance
- was wrong to structure an award so as to allow Heather to retain her state benefits.
For further information and advice, please contact:
T. 020 7227 7461
T. 020 7227 7414
This briefing is for guidance purposes only. RadcliffesLeBrasseur LLP accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.