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Will Power: How to protect your estate from claims under the Inheritance Act

The Court of Appeal decision

The recent Court of Appeal ruling in the case of Ilott v Mitson [2015] EWCA Civ 797 has shown that the Court may now be more willing to accept claims from disinherited children, even where the child is an adult and completely financially independent of the parents.

In this case Mrs Ilott made a successful claim under Section 2 of the Inheritance (Provisions for Family and Dependants) Act 1975 (“the Inheritance Act”) and was consequently awarded the sum of £143,000 from her late mother’s estate plus a further £20,000 optional capital sum.

The Ilott ruling does not however mean that individuals will be prevented from disinheriting their children or disposing of their estate how they want in all circumstances and it should be noted that the Ilott case involved the following distinct set of facts:

  • Mrs Jackson, the deceased, left her entire residuary estate to three animal charities, despite the fact that she had no apparent relationship or direct connection to the charities.
  • Mrs Ilott, the applicant was disinherited entirely from her mother’s estate in favour of the charities, despite being her only child.
  • Mrs Ilott had five children and was in very difficult financial circumstances.

How to protect your estate from claims under the Inheritance Act

When making a Will individuals should consider whether the provisions of the Will are likely to put the estate at risk of a claim under the Inheritance Act by an applicant for whom the Will does not make reasonable financial provision.

If the estate is likely to be at risk of this type of claim the individual may consider leaving a letter of wishes to be read alongside the Will. Whilst a letter of wishes will not be legally binding it can be very helpful in showing that someone has valid reasons for choosing to dispose of his or her estate in the manner specified in the Will.

It may be helpful to consider the following information when preparing a letter of wishes:

  • Where someone elects to leave a substantial share of their estate to a charity (or some other organisation) they should be prepared to explain why they have chosen to benefit that specific charity. This may involve showing that they had a relationship or at least some connection to the charity in their lifetime.
  • Where an individual has a close family member, such as a child, to whom they are only leaving a small share of their estate or where they are disinheriting a child entirely then again they should be prepared to explain why. The potential reasons for disinheriting someone are many but may include providing details of any estrangement and/or details of any loans/gifts made to the child throughout their lifetime.

Ultimately the letter of wishes should show that an individual has good and valid reasons for disposing of their estate in the way specified in the Will. A comprehensive letter of wishes which demonstrates this is likely to help an individual to avoid potential claims under the Inheritance Act by dissatisfied family members.

CONTACT CATHERINE

If you would like more information or advice relating to this article or any Wills, Trusts or Probate matter, please do not hesitate to contact Catherine Robson on 01727 798026.

© SA LAW 2017

Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them alone. You are recommended to obtain specific advice in respect of individual cases.