Families are not always straightforward. Relationships can deteriorate to the point where a parent decides that they will cut their son or daughter out of their will, maybe to punish them for behaving badly towards them or to recognise that they have had no contact for many years.
Unlike many other jurisdictions, English law does allow testators to make a will to leave their worldly goods to whoever they chose, whether this be family members, friends or the local dogs home. However, certain categories of person can make a claim against the estate under the Inheritance (Provision for Family and Dependents) Act 1975 on the basis that the will or an intestacy makes no reasonable financial provision for them. People falling within this category are spouse, civil partners, cohabitees, children and persons who were being maintained by the deceased at the date of death.
Claims under the Act by adult children are far from straightforward, especially where the child is not disabled and capable of earning a living.
Yesterday, the Supreme Court delivered its long awaited judgment in just such a claim by an adult child and reaffirmed the freedom of a testator to leave their estate to whoever they chose. This case (Ilott v The Blue Cross and others ( UKSC 17)) has made tabloid headlines, not least because its facts could easily feature in a soap opera.
Heather Illot was the only child of the deceased, Melita Jackson. Heather and her mother had been estranged for some 26 years, as the result of Heather running off with her now husband when she was aged 17. While there were three attempts at reconciliation, unfortunately these came to nothing and mother and daughter lived separate lives.
In 1984, Melita made a will which left the vast majority of her estate (which totalled around £480,000) to 3 animal charities and nothing at all to Heather. The evidence showed that Melita had had no real connection with the three charities during her lifetime. Melita also left a letter of wishes explaining why she had decided to leave nothing to her daughter.
When Melita died, Heather brought a claim under the Act, as she was entitled to do as a child of the deceased. However, simply being the deceased’s daughter was not enough. To succeed in her claim, Heather also needed to show that her mother’s will failed to make “such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for her maintenance”.
“Maintenance” means payments which, directly or indirectly, enable the applicant in the future to discharge the costs of his daily living at whatever standard of living is appropriate to him – in other words, provision to meet recurring daily living expenses. The Act is not designed to hand out windfalls or to undo what a disappointed child may perceive as a great unfairness.
Heather and her husband had a very small income and were dependent on state benefits. They have 5 children. They live in a housing association property that they have the right to buy but not the funds to enable them to do so. They have no pension for their retirement and have made no provision to deal with any eventuality such as ill health. Their income is so small that they have never had a holiday, struggle to buy clothes for their children and have to limit the food that they buy. Many of the white goods and furnishings in their home are in need of replacement.
Every case depends on its own facts but for most adult children who are in employment and who are financially independent, a claim under the Act is a tough one to make out. In considering a claim, section 3 of the Act obliges the Court to consider a number of factors which include:
- The financial resources and financial needs that the applicant has or is likely to have in the foreseeable future;
- The financial resources and financial needs that any other competing applicant has or is likely to have in the foreseeable future;
- The financial resources and financial needs of any beneficiary has or is likely to have in the foreseeable future;
- Any obligation that the deceased had towards the applicant or any beneficiary;
- The size and nature of the net estate of the deceased;
- Any physical or mental disability of the applicant or any beneficiary; and
- Any other matter including the conduct of the applicant and any other person which the Court considers relevant.
The Court is also obliged to have regard to the earning capacity and the financial obligations and responsibilities of both applicant and beneficiaries.
So, how did these factors play out in this case?
The trial judge awarded Heather £50,000. Heather argued that this wasn’t enough and appealed.
The Court of Appeal awarded Heather £143,000 to buy her housing association home plus a further £20,000. The charities thought that this was too much and appealed to the Supreme Court.
The Supreme Court said that the Court of Appeal had been wrong to overturn the trial judge’s decision and reinstated the original award of £50,000.
In doing so, the Supreme Court held that:
- What it is reasonable for a claimant to receive from the estate for her maintenance must be judged objectively, applying the 7 section 3 factors set out above. This is a flexible concept and what is required for maintenance will depend on the facts of every case;
- The Court of Appeal had got it wrong when it approached the case by determining some hypothetical standard of reasonable provision and then adjusting this upwards or downwards depending on the facts. All of the 7 section 3 factors set out above must be considered to come to a single assessment of what reasonable financial provision (if any) should be made. The District Judge had been right to take into account the nature of the relationship between Heather and her mother as part of that exercise;
- The trial judge had correctly taken into account the effect on Heather’s benefits of making an award and had not overlooked this (as had been argued by Heather in the Court of Appeal). A substantial part of the award of £50,000 could be spent by Heather on replacing white goods and other household items and that would fall within the provision of maintenance for her daily living.
- Reasonable financial provision can include providing housing but this will normally be achieved by granting a life interest rather than providing a capital sum to buy a house.
- The Court of Appeal had given little weight to Melita’s wishes and the long period over which mother and daughter had been estranged and placed too much weight on the charities lack of expectation of any gift from Melita. It should not have done so – it is not for the beneficiaries to justify their entitlement on the ground of need or expectation.
In addition to the main judgment, Lady Hale also took the opportunity to give a separate judgment which criticised what she said to be the unsatisfactory state of the law where claims are made by adult children as the Act gives no guidance on how to weigh up factors and decide if they are deserving or not of reasonable maintenance.
Would the award to Heather have been different if she had a good income? Probably. Despite the headlines, this case will not fling open the floodgates to claims from disinherited adult children seeking large sums of money from their estranged parent’s estate. What it has done is underlined that claims under the Act are very fact dependent. What the Court has to do is apply the section 3 factors set out above to the facts of each case, remembering that a child can only make a claim for maintenance and not for a good chunk of their parent’s estate that they feel should be theirs.
A final word of warning – claims under the Act must be commenced within 6 months of the date of the grant of probate. If you think you may have grounds to bring such a claim against your parent’s estate, do not delay in seeking specialist legal advice on the prospect of your claim succeeding.