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You may have seen this case reported in the news over the last few years. The general rule in England and Wales is that you can leave your property to anyone you want under your Will. You can exclude certain people including children. The law does allow certain categories of people to make a claim against an estate if the Will does not make reasonable financial provision. The test for reasonable financial provision is deliberately vague and the Court must consider a range of factors when deciding whether or not to make an award including the financial resources and needs of the person making the claim.
The case of Ilott v Mitson arises out of a claim by an adult daughter (Mrs Ilott) seeking a share of her deceased mother’s (Mrs Jackson) estate after Mrs Jackson had decided to leave everything to an animal charity instead of to her daughter. Mrs Jackson’s estate was worth around £486,000.
Mrs Ilott left home at the age of 17. Mrs Jackson and Mrs Ilott, had a number of fall outs and remained estranged for nearly 26 years. At the time of Mrs Jackson’s death, Mrs Ilott and her family depended on State Benefits to top up their income. Before this case, it was very difficult for adult children to successfully bring a claim like this. However, at the first hearing, the Judge awarded Mrs Ilott £50,000. Mrs Ilott appealed to the Court seeking a greater sum as £50,000 would deprive her of her state benefits and not provide sufficient funds to purchase the housing association property that she lived in. The charities cross-appealed on the basis that the Will should stay as it is.
At the second hearing, the Judge concluded it was reasonable for Mrs Ilott to choose to remain at home and she could not be blamed for her lack of income. The Court of Appeal awarded Mrs Ilott £143,000 to buy a house and an option to draw on £20,000 so as not to affect her means tested benefits. The Court commented that any money the charity received was a windfall and Mrs Ilott had financial needs for her and her family.
The Supreme Court restored the original order awarding Mrs Ilott £50,000. The Supreme Court essentially said that the Court of Appeal had been wrong to interfere with the first decision because that Judge was entitled to make the decision that he did. The law doesn’t set out a specific formula or method to calculate what is a reasonable financial provision for Mrs Ilott and so the first Judge was not wrong in deciding to award £50,000.
The Supreme Court considered a number of issues. The two dominant factors were the estranged relationship and Mrs Ilott’s financial position. The Supreme Court considered whether an adult child requires a moral claim in order to succeed with the claim and the Supreme Court confirmed that an “additional something” had to be present to achieve a successful outcome, which is usually a moral claim. The Supreme Court recognised that the wishes of the deceased are important and should be considered. This seems to confirm the general position that an individual is free to leave the estate as they wish, but they must be mindful of potential claims and they should show positive reasons as to why they have chosen a specific beneficiary instead of another beneficiary. In this case, Mrs Jackson left a bitter Letter of Wishes explaining all the negative reasons as to why she had disinherited her daughter and she did not include any positive reasons as to why she was benefiting the charities. Indeed, she had no particular connection to the charities and this was a factor in the Court deciding that some award should be made to Mrs Ilott.
This is an important case because it is the first time that the Supreme Court has been asked to consider a claim under this particular area of law. The judgment falls short of providing clear guidance about expectations of potential claimants and when a claim might succeed or not. Nevertheless, the Supreme Court decision does confirm that you should be free to leave your estate as you wish, but you should think carefully about the reasons choosing certain beneficiaries over others. When making a Will, it is essential to consider potential claims and you should always have a good Letter of Wishes setting out your intentions and feelings.