Illot -v- Mitson and Nahajec -v- Fowle
You write a will, you leave someone out. There can be many reasons why that happens, maybe someone other than your children has helped you out during your lifetime, maybe you feel that your children are self-sufficient and your money would be better left to charity, maybe one of your children has not spoken to you for years. An estrangement might be because of your own beliefs; maybe it is because of the actions of the child. Either way, in England and Wales there is no forced heirship and no automatic right to an ‘inheritance’ just because of a blood relationship.
The principle of testamentary freedom, the right to leave your wealth to whoever you desire, is a fundamental part of our legal system. However there are limits. The Inheritance (Provision for Family and Dependants) Act 1975 allows for certain classes of person to challenge a will if they consider they have not been sufficiently provided for.
Adult children are just one class of potential applicants. Until fairly recently it was considered that claims by adult children, who should otherwise be able to fend for themselves, were inherently weak, particularly if there was a period of estrangement. Then there came the case of Ilott -v- Mitson. Mrs Ilott was left out of her late mother’s will in favour of several charities; mother and daughter had been estranged for many years. Mrs Ilott based her claim partly on the fact that she was heavily dependent on state benefits and living in difficult financial circumstances. In the High Court she was awarded £50,000 from her late mother’s estate, worth £486,000. On appeal her award was increased to £143,000.
The case was followed with some interest as it was the first 1975 Act claim to reach the Supreme Court. The Supreme Court re-instated the first award and the decision was hailed by many commentators as a victory for testamentary freedom. Others, however, lamented the fact that the Supreme Court passed up on the chance to give some much needed guidance on 1975 Act claims and instead, reaffirmed that all of the factors set out in the Act need to be considered and the court should make a single assessment of what reasonable provision to make, taking into account all of the circumstances of the case. It did clarify that the beneficiary named in a will did not need to justify their inclusion as opposed to a potential claimant.
In July, just four months after the Supreme Court decision in Ilott, another adult child claim succeeded. Miss Nahajec (along with her two half-brothers) was excluded from the will of her late father in favour of a long-standing friend, who received the whole of the estate – £226,000. The judge in that case re-iterated that each case is fact-sensitive and the value judgment made by the court must be applied on the specific facts of the case before it. Factors which were weighed by the court in this case included, that the estrangement was at the behest of the deceased – the claimant had made many attempts to rekindle the relationship and had been rebuffed by her father. She had a genuine wish to improve her circumstances, which were currently difficult. She sought £70,229 by way of a capitalised lump sum to include the discharge of current loans, course fees and living expenses while she trained over a period of 30 months. She was awarded the sum of £30,000 discounted on the basis that she may not in fact undertake the training for various reasons.
The court – and the claimant – was undoubtedly helped by the fact that the claimant had put forward a reasonable and realistic request for provision of help for education to improve her circumstances. So many claims for provision under the Act are fraught with difficulties because of the claimant’s unrealistic expectations. Either the sum put forward as the capitalised amount for maintenance is far in excess of the value of the net estate, or the claimant’s claim is based on notions of unfairness or perceived victimisation rather than a proper analysis of how the claimant’s circumstances fit with the factors set out in the Act.
This case underlines the fact that every case will be decided on its own facts and there is a value judgment to be made, a balancing act to perform, which may differ from court-to-court and judge-to-judge. If a claimant takes advantage of that fact, it can make settlement of Inheritance Act claims at a reasonable level, at the least cost possible to the parties (which in the vast majority of cases is beneficial to all involved), so much more difficult.
This latest case does not dilute testamentary freedom. It is possible to exclude someone from a will, however the reasons for doing so must be clearly set out and must be based on a proper understanding of any potential claimant’s circumstances. It does not, however, make life easier for those looking to assess whether a claim may succeed and, if so, in what kind of amount.