John Toth, Partner in Ashfords' Trusts and Estates Team considers the Inheritance (Provision for Family and Dependants) Act 1975 and the recent ruling by the Court of Appeal in the case of Ilott v Mitson  EWCA Civ 797.
In England and Wales it was a principle of law that we are free to leave our Estates on our death to anyone we choose. However, the Inheritance Act of 1975 ("the Act") addressed a concern that spouses and young children could be left penniless if a testator chose to exclude them. The Act remedied this by giving judges a wide discretion to redistribute assets left under a will where an individual has died without making fair and reasonable provision for spouses, former spouses and dependants.
The categories of people who can make a claim under the Act are:
- A spouse or civil partner.
- A former spouse or civil partner who has not remarried or registered a new civil partnership (provided a court order was not made at the time of the separation that specifically prohibits them from bringing such a claim).
- Any other person who was cohabitating with the deceased as ''husband and wife'' for at least two years immediately prior to death.
- A child of the deceased.
- A person treated by the deceased as "a child of the family".
- Any other person who immediately prior to death was being maintained by the deceased.
Under the Act there is only one ground for a claim for an applicant and that is where the distribution of the deceased's estate does not make reasonable financial provision for them. The court must take into account certain statutory guidelines when considering a claim under the Act. The court have particular regard to:
- The financial resources and needs of the applicant and also of other applicants and/or the beneficiaries.
- The obligations and responsibilities of the deceased towards the applicant and other beneficiaries.
- The size and nature of the estate.
- Any physical or mental disability of the applicant or beneficiaries.
- Any other relevant matters including the conduct of the applicant.
How then does the recent decision of Ilott v Mitson  EWCA Civ 797 tie in with the provisions of the Act?
For many years it was assumed that adult children able to work were not automatically likely to benefit if they brought a claim under the Act. However, in the Ilott case we are reminded that an adult child can make a claim for maintenance. In effect the deceased should reasonably have concluded that her daughter needed help.
The deceased, Melita Jackson, left her estate valued at £486,000 to three animal charities ("the Charities") and expressly stated that she did not want her daughter to receive anything. Mrs Jackson had no connection with the Charities in her lifetime. The court had already found in 2007 that the deceased's failure to provide for her daughter, Heather Ilott, was unreasonable and she was awarded a lump sum of £50,000. The appeal was based around how the assessment of reasonable financial provision for Mrs Ilott had been made.
The Court found that this was a case in which they can and should make reasonable financial provision out of Mrs Jackson's estate for Mrs Ilott's maintenance and she was awarded the sum required to purchase her property (£143,000) plus reasonable expenses of acquisition. She was also awarded up to £20,000 in cash to provide her with a small amount of immediate income. The Court was particularly concerned that Mrs Jackson was on state benefits and they regarded it as unreasonable that her mother had not made provision for her, favouring charities instead. By increasing her award, Mrs Ilott could buy her home and keep her means-tested benefits.
Going forward, when preparing a Will care must be taken to consider any children of the deceased and whether reasonable financial provision has been made for them. It was also clear that the judges were unimpressed that Mrs Ilott had chosen charities which she seemed to have no connection with during her lifetime. If someone wants to disinherit their child they need to consider organisations that they have an on-going and close connection with. Just choosing charity for the sake of charity will not work.
The case may be appealed to the Supreme Court.