The Importance of Wills

INHERITANCE ACT CLAIM – ADULT BENEFICIARY

For many years it has been possible for certain people to claim in an estate of a person who has died if they feel they did not receive reasonable financial provision from that estate. One of the categories of claimant is a child of the Deceased. There has been a widespread understanding that a young child of school age would almost certainly win such a case. There was less certainty where it was an adult child making the claim and it was widely felt that such a claim would only succeed where the adult was not well off and was not capable of financially supporting themselves independently.

The recent case of Ilott v Mitson (and Others) is therefore a timely reminder of the way Courts will deal with a claim by an adult. In this case the Daughter had left home at 17 and had not been in contact with her mother for about 25 years. She had married and had five children ranging in age from 25 to 10 at the time of the court hearing. The Daughter had never had paid employment and, following an accident, her husband had an irregular low paid part-time job. The family’s income was therefore largely made up of state benefits and tax credits. The Mother had made a Will which left nothing to the Daughter and the majority of her estate to charities. The Mother had also clearly set out in two side letters why she wanted to cut out her daughter. This was not a case where the Mother had inadvertently forgotten to include her daughter.

The Court confirmed that it should not ask whether the Mother had acted reasonably in not leaving anything to the Daughter. It said that question was irrelevant. What matters is that the Judge should take into account only the seven factors set out in Section 3 of the Inheritance (Provision for Family and Dependents) Act 1975. These are:-

(a) the financial resources and needs of the applicant, now and in the foreseeable future;
(b) the financial resources and needs of any other applicant, now and in the foreseeable future;
(c) the financial resources and needs of any beneficiary of the Will or on intestacy, now and in the foreseeable future;
(d) any obligations and responsibilities of the deceased to any applicant or beneficiary;
(e) the size and nature of the estate;
(f) any physical or mental disabilities of any applicant or other beneficiary;
(g) any other matter, including conduct, of the applicant or any other person.

The Judge has to make a value judgement in weighing up these 7 factors. No one factor is more important than any other factor. In this particular case the Judge decided that the combination of factors was such that he thought insufficient financial provision had been given to the Daughter and so she should receive an award. The implication was that the Mother felt the Daughter had behaved very badly in her teenage years which led to problems between them later on and the Mother felt she therefore had every reason to cut out the Daughter. The Daughter’s conduct is one of the factors to take into account, but looked at objectively, not subjectively through the eyes of the Mother. The Judge said that it wasn’t unreasonable for a child to marry and have children, nor having had five children was it unreasonable that the Daughter stayed at home bringing them up, rather than going out to work.

Having first determined whether or not reasonable financial provision had been made, and in this case deciding that it had not, the Judge must then determine what is the right level of financial provision to award. The Judge must take into account future earning capacity, obligations and responsibilities. In this case the Daughter was awarded £50,000 from an estate of £486,000.

The Court emphasised how important it was to look very closely at the facts of every case, and to make the assessment using all seven of the factors.

Conclusions

(1)
For the person making a Will: he or she must carefully consider the effects of this Act in any case where reasonable provision is not being given to a child, whether adult or not. Clearly, whether or not provision is reasonable is not at all down to Will maker’s own view of what he or she might think is reasonable. All the Section 3 factors must be considered as that is what the Court will look at if a claim is made. Nevertheless, he or she may feel that their child’s conduct has been dreadful and caused them much hurt, possibly over many years. Whilst it is understandable that he or she may feel this, and whilst it is true to say that the child’s conduct is one factor to consider, it is not the only one and all the other six factors must be taken into account as well.

(2) Charitable Beneficiaries: this restatement of the Law will provide some disquiet to Charities. The claim brought by an applicant is made against the estate. Therefore any provision granted to the applicant is money no longer going to the Charity. The Charity will have been an entirely innocent party in all this and most probably will not have played any factor in the relationship between the Parent and the Child. However, all Charities are duty bound to defend challenges to their inheritance as they must by law try to maximise the benefit that they are given from any source, including Wills. Therefore they would find themselves involved in a Court action they did nothing to bring about, possibly with consequent expense, and almost certainly suffering adverse publicity because they have become embroiled in a court case, albeit as an entirely innocent party. If this case is going to lead to more claims by adult beneficiaries, then Charities must hope that people making Wills will think very carefully about the content.

Go back

Share

Subscribe to our RSS feed to receive all of our news updates.

This article has been prepared for general interest and information purposes only; it does not constitute legal advice and should not be relied on as such. While all possible care has been taken in the preparation of this article, no responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by the firm or the authors.