In the recent judgement of Ilott v Mitson & Ors, an estranged daughter, Heather Ilott, brought proceedings under the Inheritance (Provision for Family and Dependants) Act 1975 after her mother, Melita Jackson, left her estate worth £486,000 to animal charities when she died in 2004. Following appeal to the Court of Appeal, the Court decided on 27 July 2015 that she should receive a third of the estate.
The ruling has been described as one which could significantly weaken a person’s right to leave money to those they want to inherit it. However, it must be emphasised that judgment was decided on whether the award being given was reasonably necessary for Heather’s maintenance, by applying the test mentioned further below.
Lady Justice Arden noted that, ‘if the claimant for whom reasonable financial provision needs to be made is elderly or disabled and has extra living costs, consideration would have to be given to meeting those.’ She applied the same principle in this case where Heather had extra financial needs and relies on state benefits which Lady Justice Arden stated ‘…must be preserved.’.
Upon application of the reasonableness test, the Court of Appeal ruled that Heather should be awarded the sum of £143,000 to allow her to purchase a housing association home and the reasonable costs of acquisition. An additional further capital sum of £20,000 was also awarded to Heather providing her with an immediate capital sum from which further income needs could be met, ensuring preservation of Heather’s state benefits.
You can read the judgment in full here: https://www.bailii.org/ew/cases/EWCA/Civ/2015/797.html
The law
Under the Inheritance (Provision for Family and Dependants) Act 1975, certain persons have a right to bring a claim against a deceased’s estate for insufficient financial provision. These persons are:
(a) the wife or husband of the deceased;
(b) a former wife or former husband of the deceased who has not remarried;
(c) a child of the deceased;
(d) any person (not being a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage;
(e) any person (not being a person included in the foregoing paragraphs of this subsection) who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased;
(f) any person during the whole of the period of two years ending immediately before the date when the deceased died, the person was living—
(i) in the same household as the deceased, and
(ii) as the husband or wife of the deceased.
In order to bring a successful claim, it is necessary for the claimant to satisfy the reasonable financial provision test. For spouses, the test is “such reasonable financial provision as it would be reasonable in all the circumstances of the case for a husband or wife or civil partner to receive, whether or not that provision is required for his or her maintenance”. For other categories of claimant, the test is “such reasonable provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance”. The test therefore carries a lower threshold for spouses than it does for other claimants.
Conclusion
Although you are free in law to leave your estate to whoever you wish, if claims against your estate under the 1975 act are to be limited, it is essential that you consider the financial circumstances of your relatives and other dependants and whether provision should be made for them in your Will.
With regard to Ilott v Mitson, an appeal to the Supreme Court may follow and the legal position may yet change again.
If you wish to discuss this further, please do give us a call on 01737 854 500 or visit us. We have offices in Redhill, Woking, Wimbledon, Camberley and Teddington.