Landmark ruling for Inheritance claims

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The Supreme Court has overturned a previous ruling by the Court of Appeal in the case of Ilott v Mitson, a landmark ruling regarding claims against estates by children who have been disinherited under their parents’ Will.

Unlike some other jurisdictions, we have the principle of testamentary freedom in the UK. This means that you are entitled to leave your estate to whomever you wish in your Will. However, the Inheritance (Provision for Family and Dependants) Act 1975 created an important caveat to this principle. This legislation allows certain family members to make a claim against an estate on the basis that the financial provision made for them is inadequate for their needs.

Mrs Ilott made a claim against her mother’s estate because she had been disinherited from the Will. Mrs Ilott was estranged from her mother and had been deliberately and expressly excluded from the Will. Under the 1975 Act, Mrs Ilott was entitled to claim against the estate for provision for her maintenance needs. The Will had left the entire residuary estate (of approximately £500,000 in total) to three Charities. Mrs Ilott had dependant children and was living in social housing.

The District Judge awarded Mrs Ilott the sum of £50,000 from the estate, in order to meet her needs for her maintenance. Maintenance is not defined within the legislation but can include a lump sum payment to meet the claimant’s needs.

Mrs Ilott then appealed the decision on the basis that the award of £50,000 was insufficient to meet her needs, because it would deprive her of her means tested benefit but would also not allow her to buy her property. The Court of Appeal agreed and awarded her the sum of £143,000, in order to allow her to buy her property, together with a further sum of £20,000.

The three Charities then appealed the Court of Appeal decision to the Supreme Court. The Supreme Court has now overturned the Court of Appeal award so that Mrs Ilott has now been awarded the original sum of £50,000. The reason that the Supreme Court gave for this was that the District Judge’s interpretation of “maintenance” was correct. The Court said that 1975 Act is intended to provide the claimant with “maintenance”, which is by definition an income rather than capital. Maintenance “cannot extend to any and everything which it is desirable for the claimant to have. It must import provision to meet the everyday expenses of living.”

The Supreme Court ruling has been hailed as a win for people who wish to leave their children out of their Wills. However, this ruling, is specific to the facts of the case. It should be remembered Mrs Ilott did infact received an award despite being disinherited from the original Will. The case nonetheless sets a precedent that adult children can successfully make a claim against their parents’ estates in certain circumstances. The position therefore remains that full consideration must be given to the effects of the 1975 Act when deciding whether to exclude or limit the inheritance of a family member. Our advice is if in doubt consider making some provision in your Will to avoid any claims being made against your estate in the future.