The recent case of Ilott v Mitson caused a bit of a stir in the media over its possible impacts on testamentary freedom in England and Wales. ‘Your will means NOTHING’ was the headline in the Express, with similar headlines in the Mail and the Telegraph and much of the media named it as a landmark or ground-breaking case. Much of the reporting of the case was done without a full account of how the decision was made and is likely to be an overreaction.
The Inheritance (Provision for Family and Dependants) Act 1975 allows a child to apply for an order (for a lump sum or periodical payments) where the deceased has not made reasonable financial provision for their maintenance. In such a case the court can make an order for a lump sum or periodical payments that will, directly or indirectly, pay for the costs of daily living at the standard appropriate to the applicant to be paid.
The facts of the case are now fairly well known. Heather Ilott became estranged from her mother Melita Jackson in 1978 when she left home to live with her boyfriend, whom she later married. Jackson did not approve of her daughter’s choice. There were three attempts at reconciliation between the two, all of which ended in failure, the last of which due to Jackson taking offence at Ilott naming her fifth child after her paternal grandmother, who Jackson did not like.
Jackson excluded Ilott in her will, leaving the majority of her £486,000 estate to the RSPCA, RSPB and the Blue Cross. She left a letter of wishes stating “if my daughter should bring a claim against my estate, I instruct my executors to defend such a claim as I can see no reason why my daughter should benefit in any way from my estate”. Ilott did bring a claim on the estate under the Inheritance (Provision for Family and Dependants) Act 1975 and in the first instance and was awarded £50,000. This was upheld on the first appeal and has now been overturned and increased to allow her to buy her house, with an option for a further £20,000 (approximately £164,000 overall).
Many have questioned why this original award was overturned by the Court of Appeal. Lady Justice Arden explained that the judge of the original award, DJ Million, did not seek out the effect of £50,000 on Ilott’s benefits. The right to claim some of her benefits would be lost once she had capital over £16,000, unless the capital is invested in her home. This meant her options were to either have a spending spree of £34,000 or to lose out on some of her benefits and be in a worse off financial position, neither of which can be seen as maintaining Ilott.
Reasons for awarding £164,000
Ilott’s present income and expenses were seen as very basic and her situation is not likely to improve in the future as she has no pension, a small earning capacity and no qualifications or recent work experience.
The court felt that just because she was able to live within her means in these difficult financial circumstances, did not mean that her income fulfilled all her needs and certainly was not reasonable financial provision to maintain her at present or in the future. To give a lower sum would be akin to punishing her for living within her means. Her financial situation outweighed the importance that is normally attached to the fact that the she is an adult child who had been living independently for so many years.
The estrangement was not enough to deny or even weaken Ilott’s claim. There was no evidence that she wanted to be estranged from her mother and whilst she had disapproved of Ilott’s life choices, she had made a success of her life as a mother and homemaker. The courts found it difficult to allocate where fault for the estrangement should lie, there was evidence that it could have been the result of Jackson’s inability to make lasting relationships with anyone. Her mother had acted with ‘unreasonable, capricious and harsh’ behaviour towards her and as a result was deprived of any expectation of receiving anything from the estate.
The charities on the other hand did not have the same financial needs. They too were not expecting any money from Jackson’s estate as she had no prior links to them and so were not prejudiced by receiving a lower amount.
In Arden’s view, where a claimant is on state benefits, which must be preserved, consideration should be given to doing so, similar where an applicant has extra living costs due to being elderly or disabled. By increasing the amount to allow Ilott to buy her house, she would be able to keep her benefits and have extra money that would have gone towards renting the property. The court also allowed the option to receive £20,000 which could be invested to receive an income of £331 per year and whilst this as not a large amount to reflect the factors that weighed against her.
For a number of years it has been possible for non-dependant adult children to make claims on their parents’ estates. These decisions are made on a case by case basis and are restricted to their own facts. Whilst the impact of Ilott v Mitson is currently uncertain, the most likely situation will be that this decision will too be limited to its own unique facts. The court’s decision may have been different if Ilott was not reliant on benefits, if Jackson had links to the charities or if the beneficiaries were non-charitable ones.
There is the possibility that the floodgates could be opened, leading to a large increase of successful claims from disinherited children, but this outcome is unlikely. The courts are usually reluctant to create a large amount of claims. The decision may however give hope to some reluctant applicants to apply when, without the decision, they may not have.
The charities may yet appeal the decision, as they are currently giving careful consideration as to whether to take the case to the Supreme Court.
When excluding a person in a will, it has always been advisable to include a letter of wishes stating why they are being excluded. Due to the emphasis placed on Mrs Jackson’s lack of links to her charities, it now may be desirable to include reasons why charities or other persons are beneficiaries instead or even to create links with the charities during lifetime.
By having evidence of an existing relationship with a charity, it can demonstrate that the gifts are not being made to spite an excluded child and allow the charities to have some expectation of benefiting from the estate.