Testamentary Freedom – Does the principle still exist?

Ilott v Mitson – Will this affect future claims?

The case of Ilott v Mitson is one which, by now, you will be most familiar with. The recent Court of Appeal ruling received huge publicity and concerned a claim for reasonable financial provision under the Inheritance (Provisions for Family and Dependents) Act 1975 by an adult, non-dependent child against her estranged mother’s estate. Much of the concern around the case concerned the potential impact on the principle of testamentary freedom when making a Will in England and Wales. What most people do not realise about this case, is that it has been ongoing for the best part of the last decade, with the potential for an even further appeal from the charities involved in the case.

So what are the facts behind this case?

The facts to this case are based upon that of a typical family dispute.

Melita Jackson made her last Will in 2002 disinheriting her only daughter. Alongside the Will, she had written a letter explaining why she had chosen to disinherit her daughter. In 1978, aged 17, her daughter Heather, had left home and eloped with her boyfriend, subsequently causing the relationship between mother and daughter to break down. There was little contact between the two thereafter. Mrs Jackson died aged 70, in 2004, with an estate valued at around £486,000, and had left everything in her Will to three animal welfare charities; the Blue Cross, the RSPB and the RSPCA.

Mrs Ilott (Heather) contested her mother’s Will under the Inheritance (Provision for Family and Dependants) Act 1975. The Act allows certain categories of people, including a child of the deceased, to apply for reason financial provision under the estate where they have not been reasonably financially provided for in the Will. Mrs Ilott had not worked since the birth of her eldest son and her husband claimed he could not work due to back problems; both relied on state benefits.

Previous Decisions of the Court

In 2007, the Court awarded Mrs Ilott £50,000 after deciding that the estate had not made reasonable financial provision for her.  There were numerous appeals after this from Mrs Ilott, with her maintaining that £50,000 was insufficient and that this was not enough to buy her house from the housing association and also maintain her entitlement to state benefits. The appeal was lost and resulted in the High Court reversing the decision to award her the money in the first place. This was again appealed, and in 2011, the Court of Appeal ruled that Mrs Ilott was entitled to the share after all. This was further appealed and Mrs Ilott lost her claim to receive a larger share of the money again in 2014.

Present Decision

This bring us to the most recent decision of the Court of Appeal, in which Mrs Ilott was successful in having the share of the money increased. Mrs Ilott was awarded approximately £164,000 overall, roughly two-thirds of the estate, plus an option for an additional £20,000 to meet her income needs. This would allow her to purchase her housing association owned house and also enable her to continue to receive non-means tested benefits.

So why did the Court overturn the previous decision and award the claimant more?

It was ruled that the previous judge had failed to consider the effect that the award would have on Mrs Ilott’s state benefits and it was wrong of them to limit the award simply because she had a lack of expectancy and an ability to live within her limited means.

The decision highlights the importance of the needs of family over and above non-related beneficiaries i.e. charities. The fact that Mrs Ilott never expected to inherit from her mother’s estate was irrelevant as the charities did not have any real expectation of inheriting from the estate either.

The Court of Appeal further indicates that applicants who are in destitute circumstances should be considered in a similar way to the elderly, or those with disabilities, in that they have far greater financial needs than those who are financially better off. The charities were not in anywhere near similar circumstances and in the Court’s view, the simple fact that the charities received something from the estate, was fair.

What does this mean Will writing and for cases in the future?

People are beginning to ask whether this will set a precedent for future cases. If this is the case it is only a precedent in court and not in legislation. This means that it is for the court to decide whether the claimant has right to benefit. Decisions are made on a case by case basis and all the case facts are considered. There is nothing to suggest that there will not be a ruling in the future which counteracts the decision made by the courts in this case.

There have been suggestions that this ruling will make it easier for disinherited relatives, particularly children, to challenge Wills and claim larger sums. The case may spur on people to bring a claim against an estate when they are inadequately provided for as it may give them the confidence or the belief that they will be awarded with the same outcome. However, we have to bear in mind that this Act has been in place for years now, and cases are ultimately decided on a case by case basis.

It has always been important for a testator to consider the impact of disinheriting family members when writing a Will, and indeed explaining the reasons for doing so. However, there is now some suggestion that you will need to explain and prove that you have some connection with those you are leaving your estate to instead, particularly where the beneficiaries are charities. The case does also indicate that the court is likely to side with family members as opposed to charities, particularly where there is a financial need present.

Our closing comment – Unless the Wills Act 1837 is repealed then our right to testamentary freedom still exists and the need to write a Will is still of primary importance.