The Supreme Court has given its decision in the case of Ilott v Mitson, allowing the appeal of the charities and ordering that the decision of the Court of Appeal should be set aside and the order of the District Judge in the Family Division restored.
This case grabbed headlines when the Court of Appeal in 2015 ruled that the District Judge’s decision to award Mrs Ilott, the daughter of the deceased Mrs Jackson, £50,000 was not enough to provide her with reasonable financial provision from her late mother’s estate and upheld her application for further provision under the Inheritance (Provision for Family and Dependants) Act 1975 (the “1975 Act”).
Mrs Ilott’s initial application followed her mother’s death in 2004. Mrs Jackson left the majority of her estate (valued at £486,000) to three charities in her will, despite having had no connection to the charities during her lifetime. Mother and daughter had become estranged many years before and their attempts at reconciliation had failed. Mrs Ilott was to receive nothing from her mother’s estate under the terms of the will. In 2007 the District Judge awarded Mrs Ilott £50,000 from her mother’s estate. Mrs Ilott appealed that decision, arguing that the award was insufficient and the Judge had not considered the negative impact an award of that nature would have upon Mrs Ilott’s receipt of state benefits. In 2015, the Court of Appeal allowed Mrs Ilott’s appeal and gave its own award of:
The charities mentioned in Mrs Jackson’s will appealed to the Supreme Court, which had to decide whether the Court of Appeal was wrong:
The Supreme Court has allowed the charities’ appeal. As part of its decision, the Supreme Court commented that the District Judge did not make any error in taking into account the nature of the relationship between the deceased and her daughter. The District Judge’s conclusion that there was a failure to provide reasonable financial provision was found to be correct and the Court of Appeal agreed with the fact that the quantification of “reasonable provision” would be dependent on the nature of the familial relationship.
The Supreme Court also commented that in its earlier judgment, the award, made primarily to preserve the means-tested benefits received by Mrs Illot, was structured incorrectly. The Court’s decision yesterday left the use of the £50,000 award up to Mrs Illot.
The Court said that it cannot have been the Court’s intention in the earlier decision to surmise that dependence on benefits increases the claimant’s needs in the same way as a characteristic like disability does. However, as benefits are part of the resources of the claimant, it is relevant to consider whether they will continue to be received following an award under the 1975 Act.
The Supreme Court’s judgment also gives great importance to the concept of testamentary freedom – that individuals should be free to decide what ought to happen to their assets on death, without too much interference by the state.
The Court was also critical of the Court of Appeal’s view that the claim of the charities was not on a par with that of Mrs Ilott, and acknowledged that, whilst the charities’ claim was not based on personal needs, charities depend heavily on testamentary bequests for their work which is of public benefit and in many cases will be for humanitarian purposes. Their needs should be given as much importance as that of a claim based on personal entitlement.
The Court placed great weight on the fact that the charities were the chosen beneficiaries of Mrs Jackson, and they did not have to justify their claim on the basis of need as Mrs Ilott had to do.
What it means for will and succession disputes
This decision is significant and will provide some comfort to those who felt that the Court of Appeal’s decision made it easier for adult children (including those who were estranged from their parents) to challenge their parents’ wills if they don’t believe they have been left reasonable provision.
The ruling confirms that what constitutes reasonable financial provision and the appropriate level of maintenance for an application will vary on a case to case basis. What is clear is that Courts will give weight to the fact that family members have been completely estranged over a long period if it is shown that this was the reason why the deceased decided not to make provision for the applicant.
For further information please contact Sara Malik, Solicitor in our Commercial Disputes team.
Call: 0191 232 8345