Life after death01 Nov 2016
My money, my choices? A recent case (Ilott v Mitson) has ignited fear of adult children that have been written out of Wills bringing successful claims against estates.
In the Illott case Mrs Jackson died in 2004 leaving three things: a net estate of £486,000, a Will disinheriting her only daughter, Mrs Ilott, and a carefully drafted Letter of Wishes.
Her Letter of Wishes documented that Mrs Ilott had left home at the age of 17, and despite her mother’s great efforts to contact her she asked that she contacted her no more. Mrs Jackson had seen her daughter twice in the last 26 years, and she explained in her Letter of Wishes that she had made it clear to her daughter that she could expect no inheritance from her estate.
Mrs Ilott made a claim against her mother’s estate under the Inheritance (Provision for Family and Dependants) Act 1975- ‘IPFDA’. This was opposed by the three beneficiaries to her mother’s Will: the RSPCA; RSPB and Blue Cross. Mrs Ilott received an initial award of £50,000 of which she successfully appealed with the Court of Appeal granting her £143,000 to enable her to purchase her home alongside the option of a further £20,000 to provide for her income needs.
The determining factor in this case appeared to be the financial need of Mrs Ilott and her family being greater than that of the charities who do not rely on any competing need and therefore, “they are not prejudiced by what may be a higher award than the court would otherwise need to make”.
The boundary may be somewhat blurred if the court were presented with a claimant that did not have any real financial need weighed against non-charitable beneficiaries.
Autonomy v Need
A claim against an estate may be issued within 6 months of the grant of representation. In determining whether such a claim will be successful a court must take into account the following factors (IPFDA):
- The financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;
- The financial resources and financial needs which any other applicant…has or is likely to have in the foreseeable future;
- The financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;
- Any obligations and responsibilities which the deceased had towards any applicant…or towards any beneficiary of the estate of the deceased;
- The size and nature of the net estate of the deceased;
- Any physical or mental disability of any applicant… or any beneficiary of the estate of the deceased;
- Any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.
Defending a claim under the IFPDA- 4 tips:
1. Document your reasons;
2. Consider modest legacies;
3. Utilise discretionary trusts;
4. Include a no-contest clause;
Never forget: a court cannot be dispossessed of its powers under the IFPDA. However, protective measures can be taken to ensure that you argue your case whilst you still have a voice.
Do our decisions require greater protection?
The RSPCA, RSPB and Blue Cross have appealed the Court of Appeal decision in Ilott and the case is due to be heard in the Supreme Court in December. Will they honour the principle of testamentary disposition or take a step closer to forced heirship rights?
To be continued…