The newspapers have given a lot of publicity to the case of Mrs Ilott who received a £164,000 share of her late mother’s estate, despite not being a beneficiary under the Will and being estranged from her mother. The decision of the Court of Appeal has led many to question how and why this happened and to wonder how they can ensure their wishes are followed so far as is possible on their death.
Mrs Jackson died in 2004, leaving a net estate valued at approximately £480,000. Mrs Jackson’s Will provided for her entire estate to be divided between three charities.
Mrs Jackson and her daughter, Mrs Ilott, were estranged for 26 years and Mrs Jackson made no provision for her daughter under her Will. Mrs Ilott lived with her family in a housing association property and they supported themselves from various state benefits. Mrs Ilott had no pension and limited working capacity.
Under the Inheritance (Provision for Family and Dependents) Act 1975 (the Act), there are mechanisms by which certain categories of person are able to bring a claim against an estate on the grounds that reasonable financial provision has not been made for them by the deceased. The Court must consider the ‘section 3 factors’ when deciding if the deceased had made reasonable provision for (as in this case) their child. Factors to be considered would be the present and future financial needs of the child, any obligations owed to the child and the size and nature of the deceased’s estate. If it is found that reasonable provision has not been made, the Court looks at how much should be awarded, taking into account all the circumstances.
It was decided at the outset that neither Mrs Jackson nor Mrs Ilott bore responsibility for their estrangement. The Trial Judge, however, felt that on consideration of the section 3 factors, Mrs Jackson’s exclusion of her daughter from her Will, in all the circumstances, was unreasonable. Mrs Ilott was initially awarded £50,000 from her mother’s estate.
The Court of Appeal then decided, on hearing the appeal from the lower court, that Mrs Ilott was entitled to an increased lump sum of £143,000 so that she could purchase her own home and, in the future, release the equity to provide her with pension income.
What is notable about the Judges’ decision is the importance it places on the needs of family over other beneficiaries. The Judge commented that Heather never expected to inherit from her late mother’s estate but as the charities had had no real expectation of benefitting under the Will either, this was not relevant.
The Judge was also dismissive of the charities’ needs and resources when considering the amount of award to make – anything the charities inherited from the estate would amount to a windfall. It is unlikely that such comments would have been made had the beneficiaries been relatives with strong links with the deceased.
The Court of Appeal also appears to be saying that claimants in difficult financial circumstances should be viewed in a similar manner to those who are elderly or coping with disabilities – they have greater needs than those who might be classed as financially well off. It seems that the courts will consider that charities should be grateful for whatever they receive. So will this decision affect claims by adult children under the Act and should charities be concerned about an increase in claims? The issues have been extensively misreported as an adult child has always been a category of applicant under the Act and this remains unchanged. What it might however be encouraged are claims by adult children in straitened financial circumstances, particularly where the main beneficiaries are charities.
The court is likely to err on the side of the family member, especially where there is a large estate, and when considering the amount of any award to make though, the court will consider an award for maintenance. It therefore makes sense, when met with such claims for charity beneficiaries, to take appropriate advice on mediation and settlement offers at an early stage.
What does this mean for me?
Whilst generally speaking, you can leave your property and money to whomever you wish, this case illustrates how important it is to think very carefully before making a Will and to seek legal advice before doing so. A Solicitor can advise how best to state your wishes and the reasons underpinning them, and establish evidence which can be used in case your Will is ever challenged under the Act.
If you would like to discuss this article or require further information then please contact our Estates Team on 01603 615 731 or email Philip Norton
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Chartered Legal Executive
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