MW’s specialist Inheritance Disputes Solicitor and Head of Contested Probate, Hayley Bundey, discusses the recent landmark decision by the Court of Appeal in the long running case of Ilott v Mitson. The decision will inevitably improve the chances of adult children succeeding in their claims against their parents’ Estates, as well as the value of those claims, even when they have been specifically cut out of their parents’ Wills.
Heather Ilott pursued her claim against her mother’s Estate pursuant to section 1(1)(c) of the Inheritance (Provision for Family & Dependants) Act 1975 (“the 1975 Act”). She argued that, as a child of the deceased, she did not receive reasonable financial provision from her mother’s Will from which she was specifically excluded.
Heather’s mother, Mrs Jackson, had left a side letter with her Will explaining that she had specifically excluded Heather because of her choice of husband many years previously which had caused their estrangement (of some 26 years) and for which Mrs Jackson had never forgiven Heather. Mrs Jackson instead left the majority of her £486,000 Estate to three Charities.
Heather’s case has been ongoing for many years (her mother died in 2004) and has been before various Courts on different issues relating to her claim.
- Her original claim was heard in 2007 when the judge decided that it was unreasonable for Heather to be excluded from her mother’s Estate, due in part to her straitened financial circumstances, and she was awarded £50,000 from the Estate. Heather didn’t agree that £50,000 was enough.
- She appealed the decision on the value of the claim to the High Court, where the Court in fact overturned the first Judge’s ruling that it was unreasonable to not make provision for Heather (i.e. they awarded her nothing).
- Heather appealed that decision to the Court of Appeal and in 2011 the first Judge’s decision (that it was unreasonable for her to be excluded) was reinstated though the Court did not deal with the value of Heather’s claim at that hearing and sent the case back to the High Court to deal with that.
- Then in March 2014 the High Court ruled that Heather’s appeal against the value of her claim was dismissed (i.e. the £50,000 award was to stand) and Heather then appealed that value decision to the Court of Appeal.
A Landmark Decision
Yesterday (27th July 2015) the Court of Appeal allowed Heather’s appeal on the value of her claim, replacing the £50,000 award with one for circa £164,000 (nearly 1/3 of the Estate).
The Court of Appeal felt that reasonable financial provision for Heather could only be made by giving her enough to purchase her housing association property (said to cost £143,000), with some money on top to cover the costs of purchasing it, plus an additional cash sum of £20,000 to provide for her future income needs. This sum was calculated on the basis that it would not impact her state benefits.
There were two errors in the law which the Court said the original Judge had made when valuing Heather’s claim as low as £50,000. The first error was that the original Judge should have verified the impact of an award on Heather’s state benefits, rather than just assuming what the impact would be. The second error that the original Judge made was to limit Heather’s award because she had no expectation of provision from the Estate (she accepted that she didn’t expect her mother to leave her anything in her Will).
The Court of Appeal Judges went on to confirm that:
- Whilst it is not for the Court to provide an adult child with an improved standard of living equally the Court is not bound to limit an award for an adult child (on the maintenance standard) to merely enough for them to subsist. They found that Heather’s present income was not reasonable financial provision for maintenance given the restrictions imposed on her expenditure (such as an inability to fund holidays) and the lack of any provision for her future needs (when she is older or if she suffers ill health).
- A person’s existing means are not conclusive of the appropriate level at which that person is entitled to be maintained.
- £143,000 would allow Heather to purchase her housing association property under the right to buy scheme and also enable her to cover any further income needs she had in the future by way of equity release.
- The additional sum of £20,000 was calculated on the basis of it giving Heather £331 per year for the remainder of her life so that she would have some provision for future needs without needing to go for equity release immediately. Further, it was stated that the £20,000 was “not a large amount” because the Judges weighed in the balance the Section 3 factors against Heather i.e. the fact she was an adult child living independently, that Mrs Jackson didn’t want to make provision for her and (to a small extent) the fact that there was an estrangement.
Hayley Bundey, comments that
"This is likely to be a watershed in the pursuit of 1975 Act claims for adult children who for too long have had barriers placed in the way of the pursuit of their claim by the Courts which do not exist in the legislation itself. Adult children should be treated in the same way as other applicants under the Act who are judged on the maintenance standard and the Court of Appeal has now firmly confirmed this so that there should be little doubt going forward that if an adult child is unreasonably excluded from their parents’ Wills (even if they were estranged) the Court can correct this injustice and substitute a just award in its place."
We Can Help
Hayley leads a team of specialist inheritance disputes who can help with a wide range of inheritance dispute claims. If you are an adult child who believes you have a claim for reasonable financial provision from your parents’ Estate under the 1975 Act then take advantage of our free case review by contacting Hayley Bundey or Sharon Bell on 020 3551 8500 or emailing us at firstname.lastname@example.org.