Claims made by adult children for provision out of the estate of a deceased parent are not novel at all. Children of the deceased (even though independent adults) are entitled to bring claims for a reasonable financial provision to be made for them out of their parent’s estate pursuant to the terms of the Inheritance (Provision for Family and Dependants) Act 1975. Successful claims have been made by many adult children for approximately 40 years. Re Hancock and Espinosa v Bourke, both dating back to late 1990s, show that whilst claims from able bodied children are not looked at enthusiastically, they will receive some damages if they can prove they have needs which require provision. Why has therefore the recent and still ongoing case of Ilott v Mitson sparked so much interest?
Facts of Ilott v Mitson
Ms Ilott’s mother passed away in 2004 leaving an estate valued at just under £500,000 and a Will in which she left her entire estate to 3 animal charities. Ms Ilott herself is an adult and at the time of the trial was in her mid- 40s, married with 5 children and dependant on state benefits. She was the only child of her mother, but having married against her mother’s wishes, was estranged from her since she was 17 years old.
Courts’ decisions in Ilott v Mitson
The court of first instance found that the Will, disinheriting Ms Ilott altogether, has failed to make reasonable financial provision for Mr Ilott and awarded the daughter a lump sum of £50,000.
Ms Ilott appealed to the High Court’s Family Division against the first instance decision on the basis that a sum of £50,000 awarded does not make reasonable financial provision for her. The defending charities cross-appealed alleging that in the circumstances of this case, the original Will (making no gift to Ms Ilott) was a reasonable financial provision for her.
The High Court considering the charities’ cross appeal agreed with them and concluded that the lack of provision was reasonable in the circumstances of the case. With that decision made, the issue of Ms Ilott’s appeal on the issue of the amount awarded was not considered.
Unhappy with the result Ms Ilott took the matter to the Court of Appeal. The Court of Appeal agreed with Ms Ilott and reinstated the decision of the first instance judge. It found that the Will failed to make a reasonable financial provision for Ms Ilott. The Court of Appeal sent the matter back to the High Court for a decision as to the amount to be awarded.
The High Court concluded that the decision of the first instance judge on the amount awarded was not wrong (i.e. £50,000 was a reasonable financial provision to be made). Ms Ilott disagreed and appealed for the second time to the Court of Appeal.
The Court of Appeal concluded that the decision as to the amount awarded as made by the first instance judge was wrong as it did not take into account the impact the award would have on Ms Ilott’s benefit entitlement. As Ms Ilott was reliant on means tested benefits. Had she received the £50,000, she would lose them. The award would therefore have no impact on improvement of her circumstances. The appellate court awarded Ms Ilott a sum of £143,000 to buy a house and an option to draw £20,000. Award structured in this way would not result in loss of benefits.
The charities appealed the decision of the Court of Appeal and the matter is to be heard by the Supreme Court in a month’s time. The decision of the Supreme Court is going to be awaited with great interest and trepidation not only by the parties to this claim, but also lawyers working in this area and all potential claimants. Why?
Primarily, because it is expected that guidance on the following points will be provided:
- What is meant by “maintenance”, not only as a general point, but specifically with reference to adult children. In the case of Ms Ilott, she has had no accommodation related income needs as her accommodation was being paid for by housing benefit. Can therefore the award made specifically for the purpose of purchasing a house be considered maintenance?
- Is it necessary for the court to make sure that benefits are maintained when it makes and structures an award? If not then clearly a claimant on benefits would require higher awards than claimants with income from other sources, so as to compensate them for the benefit lost as a result of the award made.
- What is the impact of estrangement and lack of expectation to inherit on awards that may be made? In the case of Ms llott, should the fact that she was estranged from her mother, but also the reason for such estrangement, bear any relevance?
- What is the impact of the fact that the claimant’s situation is a life-style choice rather than a result of their age or disability on the awards made? She was unable to find full time employment to assist her financial predicaments. However, Ms Ilott was living on limited means not as a result of disability or age. She lived in a remote place where it was difficult to find work and she had five children to look after.
- How does the claimants expectations impact on the size of the award? Ms Ilott did not expect a legacy to meet all her needs. Should she be awarded more than she first hoped for?