Many would agree that upon their death people should be free to dispose of their property to whomever they wish. If their property represents the sum of a lifetime’s work, it’s their business what they do with it upon their death.
Unlike other parts of the EU, in the UK a testator is not obliged to give part of their Estate to their spouse, their children or anyone else.
There are inevitably winners and losers in upholding this concept. The winners include any number of charities and other causes which often pop up in benefactors’ Wills. Donations to charities through legacy income run into billions each year so there is a lot at stake.
Inheritance claims by adult children
On the other hand, losers often include close or estranged family members or other dependants. But for over 40 years the Inheritance (Provision for Family & Dependants ) Act 1975 has allowed various categories of claimant a path back in to receive reasonable financial provision from an Estate, regardless of the terms of the Will (or intestacy), but only if the particular circumstances of the case permit it.
In any claim under the 1975 Act the factors a Court must consider are:
- The financial needs and resources of the applicant(s) at the date of the hearing and for the foreseeable future
- The financial needs and resources of the beneficiaries at the date of the hearing and for the foreseeable future
- Any obligations the deceased had towards any applicant or any beneficiary
- The size and nature of the estate
- Any physical or mental disability of an applicant or beneficiary
- Any other matter including the conduct of an applicant or beneficiary which the court may consider relevant.
In the case of adult children, there has undoubtedly been a gradual shift over the past few decades to make a successful claim under the 1975 Act easier.
Ilott v Mitson [2015]
It was previously difficult for an adult child who had no financial dependence on their deceased parent to make a successful inheritance claim. The question now is whether the case of Ilott v Mitson has substantially altered that position, or was its outcome particular to its own set of facts?
Ilott v Mitson was a long running dispute concerning the Estate of a deceased mother (Mrs Jackson) and her daughter (Mrs Ilott). Mrs Jackson was widowed before her daughter was born and there were no other children.
Mrs Ilott quietly left home one night at the age of 17 with her boyfriend, whom she would later marry, much to the annoyance of Mrs Jackson. A 26 year estrangement followed until Mrs Jackson passed away in 2004 leaving an Estate of approximately £486,000.
Mrs Jackson had made it plainly known to her only child that she would receiving nothing from her Estate. Mrs Jackson kept her promise and left the bulk of it to three animal charities of which she had no particular connection.
Mrs Ilott’s own financial position had for a long time been very poor and she and her family relied on state benefits. She therefore commenced a claim under the 1975 Act in 2007. After considering the factors above, the court initially awarded her £50,000 on the basis of her current benefits-based income.
Various appeals and counter appeals followed until in 2015 the Court of Appeal finally awarded Mrs Ilott approximately one third of the Estate to purchase her housing association home and in a way that would not affect her benefits.
Valuing the claim was central and Mrs Ilott had argued there was no point in making an award which would only have the effect of taking her off benefits for certain period of time only when what she really needed was enough to purchase her housing association home.
The Court of Appeal eventually agreed and confirmed claims by adult children who were reliant on benefits required an assessment of the impact any award might have on those benefits.
The Court of Appeal also commented on the absence of a connection between Mrs Jackson and the charities, who in turn had no expectation of her generosity and for that matter, no needs of their own. The charities (indeed all charities) would strongly contend that conclusion. It remains to be seen whether the charities will appeal to the Supreme Court.
So does that mean any bequest to a charity is inevitably more vulnerable in 1975 Act claims?
Possibly, but every case has unique dynamics. If Mrs Jackson during her lifetime had demonstrated continued support for the aims of the named charities over a long period, the award to Mrs Ilott may not have been remotely as generous.
But Ilott v Mitson does seem to suggest that where an adult child is in straitened circumstances and the beneficiaries of the Will are charities or perhaps non-related beneficiaries, it will be potentially easier to made successful application.
That might not be the case if the beneficiaries are close family members such as a surviving spouse. Although a testator owes no obligations to a particular charity or a cause, obligations are usually owed to the surviving spouse.
So Ilott v Mitson perhaps does not change that much at all – it depends on who the parties are, their own circumstances and what part they played in the deceased’s life.
How Nelsons can help
Kevin Modiri is a Partner in our Dispute Resolution team, specialising in inheritance dispute claims.
If you have any questions in relation to the subjects discussed in this article, please contact Kevin or another member of our expert team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.