Private Client Update: August 2015
Challenging financial provision to adult children and wills: Ilott v Mitson is not the end of the world as we know it
The recent case of Ilott v Mitson is perhaps now one of the most widely known contested probate cases. Many will have heard that Heather Ilott, a disinherited adult child, brought a claim against the estate of her deceased mother for reasonable financial provision and received an award of £164,000 in the Court of Appeal.
There have been many sensational headlines, including those which say that your will can now be ignored. However, that is not the case, and some media reports have failed to explain what the law says and the reasoning behind the Court of Appeal’s decision.
Melita Jackson, the deceased, died on 10 July 2004, leaving a net estate of £486,000. She was a widow, her husband having been killed in 1956. The accident occurred 3 months before Heather Ilott, their daughter, was born. Mrs Jackson never remarried.
Mrs Ilott became estranged from her mother in the 1970s, when she left home without her mother’s agreement to live with Mr Ilott. They eventually married and they had five children together. They both lived modestly, living in a housing association property and relying on state benefits for income.
Mrs Ilott never repaired her relationship with her mother and, in April 2002, Mrs Jackson made a will that left the entirety of her residuary estate equally between the Blue Cross Animal Welfare Society, the Royal Society for the Protection of Birds and the Royal Society for the Protection of Cruelty to Animals (“the Charities”). She had not had a connection with the Charities during her lifetime. The will was also accompanied by an ill-tempered letter of wishes, explaining why she had left nothing to her daughter.
Mrs Ilott brought a claim under the Inheritance (Provision For Family And Dependants) Act 1975 for reasonable financial provision.
One of the first misconceptions concerning wills in England and Wales is the notion that a testator has full testamentary freedom. Whilst this is the starting point, it has long been the case that a limited class of individuals can bring claims against an estate on death, notwithstanding the content of a will, if the deceased has not made reasonable financial provision to that particular individual. The 1975 Act, and its predecessor enacted in 1938, allowed such claims to be brought by individuals such as widows and children.
If a claim is brought, the court must assess the merits of the applicant’s claim, having regard to the following factors:
- the financial resources and financial needs of the applicant;
- the financial resources and financial needs of any other applicant;
- the financial resources and financial needs of any beneficiary of the estate of the deceased; 4. any obligations and responsibilities which the deceased had towards any other applicant or beneficiary of the estate of the deceased;
- the size and nature of the net estate of the deceased;
- any physical or mental disability of any applicant or beneficiary of the estate of the deceased; and
- any other matter the court may consider relevant (which may include the deceased’s wishes or the contents of the will).
Decisions of earlier courts
Though not widely reported in the press, the decision that Mrs Ilott was in principle entitled to receive provision from Mrs Jackson’s estate was made by the Court of Appeal as long ago as 2011. Overturning the High Court’s decision and reinstating the original decision made by a District Judge, it held that being provided with nothing was not reasonable financial provision for Mrs Ilott.
The Deceased’s letter of wish, left with her will, contained factual errors and was unduly harsh. The decision to leave Mrs Ilott nothing was therefore based on inaccurate factual assumptions. Mrs Ilott had need of provision, whereas the Charities, as large national charities, could not demonstrate specific needs. This was also a large estate (£486,000), out of which provision could be made without depriving the Charities of the bulk of estate. The District Judge originally awarded Mrs Ilott £50,000.
The recent decision
The recent decision concerned a further appeal on the issue of whether Mrs Ilott should receive more than £50,000. The High Court said no last year, but the Court of Appeal again disagreed. It held that the District Judge erroneously exercised his discretion and that Mrs Ilott should receive £143,000 to buy her home under the right to buy scheme, a sum reflecting the costs of acquisition and a capital sum of £20,000.
The Court of Appeal ruled that any award made to Mrs Ilott had to be for her future maintenance. For her, this meant being provided with a property for the rest of her life. The effect of the District Judge’s original order meant that she would lose her state benefit (and thus be forced to spend the money on living) or, in the alternative, she would have had to go on an immediate spending spree to preserve her benefits. She was wholly reliant on benefits, so any award which prevented her from receiving them could not be said to be reasonable financial provision for maintenance.
The Court of Appeal therefore altered the award, making the following key points in support:
- The Charities had their own resources and they had no specific needs which needed to be taken into account.
- Mrs Ilott lived independently and she was not supported by the deceased. The court was therefore not concerned in providing her with an income that would fully support her needs.
- The role of the courts is to ensure, in the case of an adult child, reasonable financial provision for maintenance only.
- The estrangement should not deprive Mrs Ilott of award. There was no suggestion she wanted to be estranged from her mother, she had made a success of her life as being a mother / homemaker (even if her mother disapproved of those choices) and it was difficult to apportion the blame for the estrangement on either side.
- In the case of Mrs Ilott, who was reliant on state benefits, reasonable financial provision needed to be such that it preserved those benefits. This meant that she was given an award to acquire the house and a maintenance figure which did not affect the entitlement.
A change in the law?
The decision in this case is not a change in the law. However, it does confirm that there needs to be no special circumstances or moral obligation for an adult child to bring a claim. The case will be cited in the future in support of claims brought by adult children.
However, the key problem for the Charities is their lack of financial need. All were substantial national organisations. Had the other beneficiaries been family members or other individuals with need, the Court of Appeal could well have reached a different decision.
Another key point of note is the size of the Deceased’s estate. At £486,000, the value of her estate was higher than many estates and it was large enough to bear an award of a third to Mrs Ilott (although it is highly likely that the Charities’ remaining share was consumed in legal fees). Had the estate been much more modest, the Court of Appeal would have faced a much more difficult decision.
Finally, the main point to take away is the importance of the factors in assessing Mrs Ilott’s claim. Mrs Jackson should have addressed her mind to this back in 2002, when she made her will. Had she written a less emotive, rationally argued and factually accurate letter of wish, the Court of Appeal would have been unlikely to have been so damning of the rationale behind the award and it might have given greater weight to Mrs Jackon’s wishes than it did.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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