The chances of doing so are now much better than they were following the final decision in the case of Ilott v Blue Cross and others which has just been to the highest court in the land, the Supreme Court.
The story line of Ilott v Mitson is like a long running soap! Or at least Dicken’s “Bleak House”.
The Supreme Court, in its first decision on a claim under the Inheritance (Provision for Family and Dependants) Act 1975, “(Inheritance Act”) has given its verdict with the claimant receiving the paltry sum of £50,000 from an estate of almost £500,000. The Inheritance Act allows certain people a right to make a claim on the basis that the will of the deceased did not make reasonable financial provision for them.
BACKGROUND TO THE ILOTT CASE
Heather Ilott was left nothing from the estate of her mother. Her mother left her estate to charities. Heather had been estranged from her parents for many years. By the date of her mother’s death, she had five children and she and her husband relied on state benefits. Heather made an application for an order under s2 of the Inheritance Act for reasonable financial provision from her mother’s estate.
Proceedings were commenced in the Family Division, a judge awarded Heather £50,000 as a capitalised maintenance sum. Neither she or the charities were happy with this, and both sides appealed – Heather contended that the amount was not enough, and the charities argued that her claim should have been dismissed.
A more senior Judge in the Family Division dismissed Ms Heather’s claim and allowed the charities’ cross appeal – so the charities received the entire estate.
Heather appealed next to the Court of Appeal. Her appeal was allowed. Her case was sent back to the Family Division for a different judge to hear the case.
A Judge in the Family Division heard the appeal in October 2013. In a judgment dated 3 March 2014, that Judge dismissed Heather’s appeal against the original judgment. So, Heather was back to receiving the sum of £50,000.
Heather appealed again to the Court of Appeal as the original Judge had failed to appreciate the effect of the award on her state benefits. On 3 July 2015, the Court of Appeal heard the case and in a judgment on 27 July 2015 they awarded her £143,000 for property acquisition (so that she could exercise her right to buy of the housing association property), and £20,000 as additional capital which would not affect her rights to means tested benefits.
Predictably the charities were unhappy and they appealed to the Supreme Court asking them to overturn the decision of the Court of Appeal. The case was heard on 12 December 2016 and the judgment has now been given
The Supreme Court agreed with the charities, and allowed their appeal. So, the original decision of the District Judge made in Part 1 stands. The Supreme Court made the following points:
- The Court of Appeal had not given sufficient weight to the mother’s clear wishes. She did not want her daughter to benefit from her estate.
- The Court of Appeal had also not given sufficient weight to the long estrangement between the parties – although the Supreme Court emphasised that awards under the Inheritance Act are neither rewards for good behaviour or punishment for bad.
- The level of maintenance awarded in any case is not limited to subsistence level but nor does it mean simply providing whatever the Claimant says they need. It should be the provision of income rather than capital, but it might be most appropriate for it to be provided in the form of a lump sum from which both income and capital could be received. ‘Maintenance’ might include a car to allow someone to get to work, white goods and redecoration for a property, a life interest in a property and a holiday.
- For any Claimant who is not a spouse, (or former spouse) they will probably need to show a moral claim as well as the need for maintenance.
- State benefits are a resource of a Claimant, and the Court must consider what effect a judgment will have on state benefits.
Very few Inheritance Act claims ever reach Court – most involve disputes within a family where people do not have the appetite for airing their dirty laundry in public, or where the size of the estate simply does not warrant it. In this case, the legal costs must be many times the value of the estate many of the barristers involved have worked for free!
So how can I avoid my will being challenged?
- If you do not wish to benefit your children, you should seek legal advice about the best way of achieving this
- It may be that if you do not get on with your children that you should say in your will that you do not wish them to benefit (ideally refer to the reasons why in a separate letter) to prevent there being any risk of the will not being admitted to probate if the reasons were scandalous.
- NB when a will is admitted to probate it becomes a public document so your children would be able to obtain a copy. This is another good reason for not putting the reasons in a will. It may inflame a difficult situation.
- Sometimes the very elderly fall out with their children due to their own mental frailty. If you see a lawyer, they will form an initial view on your capacity and may instruct a doctor to prepare a report if they are in doubt about your mental capacity.
- Consider carefully who you wish to benefit. If a charity is a residuary beneficiary and a claim is made, then a charity is more likely to challenge a claim than an individual.
- If you love your child and want to make provision for them, but think they are not good with money, then there are various measures you can employ to safeguard assets for the next generation.