Charities win at Supreme Court in claim against estate

Posted by Cathryn Culverhouse on
Charities win at Supreme Court in claim against estate
The Supreme Court has today (15 March 2017) handed down its judgment in Ilott v The Blue Cross & Others. This is a landmark decision and the first case of its kind to reach the UK's highest Court.

Heather Ilott, an only child, was cut out of her mother's will when she left the family home against her mother's wishes aged just 17 to live with her now husband with whom she has five children. The mother and daughter never reconciled their differences. Mrs Ilott and her family lived independently from Ms Jackson and received a number of benefits with a total annual income of around £20,000. Ms Jackson (the mother) made a will which left her entire estate (worth just under £500,000) to charities with which she had no real connection. Before her death Ms Jackson wrote to her lawyers stating that she could see no reason why her daughter should benefit from the estate and explicitly instructed the executors of her estate to fight any claims for inheritance made by her daughter.

As a result of her mother's death Mrs Ilott made a claim under the Inheritance (Provision for Family and Dependants) Act 1975 which allows certain classes of individuals to apply for "reasonable financial provision" under an estate if it does not adequately provide for them. For more information on these types of claims please see here.

Mrs Ilott was awarded £50,000. Mrs Ilott appealed the decision on the basis that the inheritance was too low and deprived her of her means-tested benefits.  The Court of Appeal ruled that the trial judge had erred in deciding that the inheritance should be limited in light of the estrangement and that the inheritance should not interrupt the state benefits received by Ms Ilott and her family. They therefore allowed her appeal and awarded her £143,000 to purchase her housing association property and an option to receive £20,000 in instalments to allow her to continue to receive her benefits.

The Supreme Court have today handed down their judgment and unanimously voted to reverse the Court of Appeal's decision reinstating the judgment of £50,000 on the basis that they had no proper basis for interfering with the trial judge's decision. The trial judge was allowed to take a "broad brush approach" and apply the Act as he saw fit.

Within the decision the Supreme Court emphasised a number of points, including that it was deliberate drafting of the Act to limit inheritance for any applicant other than a spouse to maintenance only. Maintenance does not extend to what is desirable to the applicant but is also not limited to subsistence. It was also commented that the Act does not require the Court to set a hypothetical standard of reasonable provision as its starting point which is then adjusted to give regard to the factors in section 3. The judgment clarified the position that beneficiaries under the will, whether relatives, charities or anyone else, do not need to justify their claim either by need or expectation. The testators' wishes remain important and should be afforded considerable weight.

The Supreme Court commented on the unsatisfactory state of the current law and the fact that it provides no guidance on the weight of each factor to be applied by the Court, especially in relation to adult children. The decision has been welcomed by charities in providing greater clarity as to when the Court might be prepared to depart from the testators' wishes.

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Cathryn is a solicitor currently seated in the Commercial Litigation team, based in Oxford.

Cathryn Culverhouse
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