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Wills, Probate, Tax & Trusts

Ilott v Mitson : A first for the Supreme Court

March 31, 2017

On 15 March 2017 the Supreme Court handed down Judgment in the case of Ilott v Mitson.  It is the first time that the Supreme Court has considered the Inheritance (Provision for Family and Dependants) Act 1975 (the “Act”) and the case is of great importance to both legal practitioners and clients.

Background

Heather Ilott was the only child of the late Mrs Jackson.  Mrs Jackson was widowed after only four years of marriage whilst pregnant with Mrs Ilott.  When 17 Mrs Ilott ran away from home with her boyfriend, to whom she is now married, with whom she has had five children and, of whom Mrs Jackson did not approve.  There followed a lifelong estrangement between mother and daughter – various attempts at reconciliation were made but none were successful.  Mrs Ilott was financially independent of her mother but reliant mainly on state benefits for support.

The Act enables various classes of persons to make a claim for “reasonable financial provisions” from the estate of a deceased person.

Mrs Jackson’s Will left her £463,000 estate to charity and made no provision for Mrs Ilott.  Mrs Jackson specifically instructed her executors to resist any claim which Mrs Ilott might make against her estate.  Following Mrs Jackson’s death, well over 10 years ago, Mrs Ilott began proceedings under the Act for financial provision from Mrs Jackson’s estate as a child of the deceased entitled to: “such financial provision as it would be reasonable in all the circumstances of the case for [her] to receive for [her] maintenance”.

Mrs Ilott succeeded in her claim and was awarded a sum of £50,000 at first instance.  She appealed and the Court of Appeal increased the award to £143,000 to enable her to buy the house she lived in and a lump sum of £20,000.  The charity beneficiaries appealed to the Supreme Court.

The Supreme Court unanimously allowed the charities’ appeal and reinstated the original award of £50,000.

The Supreme Court’s Decision

The Supreme Court’s decision has been hailed in the media as reinforcing the freedom of an individual to leave their estate to whomever they like but this is a gross oversimplification.  It should not be forgotten that whilst the Court of Appeal decision was reversed, the Supreme Court reinstated the original award of £50,000.  Mrs Ilott’s claim therefore succeeded albeit to a limited degree.

So what does this mean when making a Will which excludes adult children?

  • The Supreme Court noted that the Act gives precious little guidance in respect of claims by adult children - a situation which Lady Hale described as “unsatisfactory”.  In short this means that the law will remain uncertain and each claim will need to be judged on its facts.
  • The Supreme Court has, broadly, upheld the previous decisions of the lower courts which limit the ability of adult children to make successful claims under the Act.
  • The court has no “carte blanche to reform the deceased’s dispositions to accord with what the court itself might have thought would be sensible if it had been in the deceased’s position”.  The powers of the court are therefore limited to providing “reasonable financial provision” for a claimant.
  • Reasonable financial provision, in respect of claims by children of the deceased, is defined by the Act as “such financial provision as it would be reasonable in all of the circumstances for the applicant to receive for his maintenance.  Reasonable maintenance is, therefore, key.


    • The Supreme Court agreed with the view expressed in earlier cases that “maintenance denotes only payments which, directly or indirectly, enable the applicant in the future to discharge the cost of his daily living at whatever standard of living is appropriate to him”.  The Supreme Court went on to say that “maintenance is judged not by a subsistence level but by the standard appropriate to the circumstances”.  Nor does maintenance “extend to any or everything which it would be desirable for a claimant to have”.
    • Thus, an adult beneficiary who is in work; was not supported financially by their parent; has their own home; and, is living within their means is unlikely to be able to mount a successful claim.  However, the playboy son of a millionaire previously indulged by their parent and used to a life of relative luxury but now written out of the will might secure an award, albeit a limited one.
  • The original trial Judge commented that Mrs Jackson was capricious and unfair in her criticisms of Mrs Ilott and her decision to exclude her altogether from her estate was harsh and unreasonable.  However, where a testator has acted unreasonably or indeed spitefully towards a claimant it may not follow that they failed to make reasonable financial provision for a claimant.  Conversely, a claimant’s behaviour may have been impeccable but “it is not the purpose of the Act to provide legacies or rewards for meritorious conduct”.
  • The Court of Appeal suggested that the wishes of a testator do not need to be considered where they have failed to make reasonable provision for a claimant.  The Supreme Court expressly disagreed with this view – “it was not correct to say that the wishes of the testator could be ignored indeed, it is not the case that once there is a qualified claimant and a demonstrated need for maintenance the testator’s wishes cease to be of any weight.  They are part of the circumstances of the case and fall to be assessed in the round together with all relevant factors”.

Implications

It can be argued that the Court has preserved the notion of testamentary freedom – “an Englishman still remains at liberty at his death to dispose of his own property in whatever way he pleases”.  However, much will depend on the circumstances of a particular case.  Executors in particular need to take care – they may become personally liable for costs if they fail to deal with claims properly and impartially.  Executors should take care not to distribute an estate within six months of the date of the Grant of Probate as that is the time in which claims under the Act can be brought.

Any executor or beneficiary faced with the possibility of a claim under the Act should seek expert legal advice.

Please contact Bart Obszynski or Bonita Walters for further advice. 


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Ilott v Mitson : A first for the Supreme Court

Bart Obszynski

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