Ilott v Mitson & Ors [27.07.15]
Court of Appeal overturns High Court decision in Ilott v Mitson & Ors, where a claim had been made by an estranged daughter against her mother’s estate under the Inheritance (Provision for Family and Dependants) Act 1975 as the mother had disinherited her daughter in favour of three charities.
The Court at first instance had considered the deceased unreasonable, capricious and harsh despite her attempts to explain the reasoning behind her decision to disinherit her daughter in letters prior to her death.
Whilst previously the Courts have been reluctant to allow claims made by independent, adult children under the Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”), this decision could open the door for claims where the claimant is considered to be in financial straits. The judge at first instance also commented that:
“… the reasons given by the deceased for excluding her daughter, set out in letters written in 1984 and 2002, both contained a number of factual inaccuracies in the attempt to explain her decision, which adds to and supports the unfairness.”
Firms preparing Wills for clients wishing to disinherit family members will need to be very careful to ensure their clients are warned of the dangers that their Will could be challenged, and those they wish to disinherit could receive some benefit if successful. It is also important that solicitors discuss the reasoning behind excluding family members and best practice would be to record this in detail given the possibility (as occurred in this case) that excluded family members may seek to challenge the Will, and disgruntled beneficiaries, who have had their share in the estate reduced (due to a successful challenge under the Act), may attempt to bring a claim for compensation.
The Appellant, Mrs Ilott, was the only child of Mr and Mrs Jackson, and was raised by her mother following her father’s death a few months before her birth. Mother and daughter fell out in 1974 following Mrs Ilott’s elopement with her boyfriend (who she later married) at age 17. They remained estranged for some 26 years prior to Mrs Jackson’s death in 2004 despite attempts at a reconciliation.
In her Will, prepared in 2002, Mrs Jackson left her estate (valued at £486,000) to three charities: The Blue Cross, the RSPB and the RSPCA. Mrs Ilott, dependent on state benefits and of limited means, brought a claim against the charities and the personal representatives of her mother (although the personal representatives played no part in the litigation) under the Act. She claimed c.£240,000 to re-house her family in a property of a better standard to that in which she was living.
The Court at first instance found (1) the fact Mrs Ilott was an adult did not debar her from establishing that her mother’s Will did not make reasonable provision for her, (2) it was relevant that she was of limited means, and (3) the rejection by Mrs Jackson of her only child at age 17 (which was then maintained) was unreasonable. Mrs Ilott was awarded £50,000 on the basis that she had not had any expectancy of any provision for herself, and she and her husband had managed their life over many years without any expectancy that Mrs Ilott would receive anything under her mother’s Will. The award affected her entitlement to state benefits.
Mrs Ilott challenged the sum awarded to her in the High Court but was unsuccessful; her argument (in effect) that because there would be no benefit to her unless her housing need was met, the award must achieve that result. Mrs Ilott appealed to the Court of Appeal.
Whilst the Court of Appeal’s decision focused upon quantum, it is notable that the Court considered Mrs Ilott’s financial resources so basic that they outweighed the importance that would normally be attached to the fact that she was an adult child who had been living independently for many years. The Court had to balance the claims on the estate fairly and, as Mrs Ilott had more financial need (given her reliance on state benefits), consideration to meeting those needs had to be given.
Giving the leading judgment, Lady Justice Arden commented that:
“… this is a case where the court can and should make reasonable financial provision out of the deceased's estate for [Mrs Ilott’s] maintenance so that her living expenses are relieved without affecting the state benefits on which she relies.”
Whilst the Court had to balance the claims on the estate fairly, as Mrs Ilott had more financial need, consideration to meeting those needs had to be given. It was also the case that if Mrs Ilott’s state benefits were not preserved there was little or no financial provision for maintenance at all. As the charities did not have a competing need (indeed any money from the estate would be a windfall), they were not prejudiced by what might be a higher award than the court would otherwise need to make.
The Court of Appeal therefore proceeded to re-exercise the discretion to make the award in favour of Mrs Ilott, deciding that reasonable financial provision could only be made for Mrs Ilott by providing her with the sum she required to buy her current home (£143,000). She was also awarded the amount of the reasonable costs of acquisition of her home, and an additional sum of £20,000 to provide an immediate capital sum from which her further income needs could be met.