What is reasonable financial provision for family members in your Will?

… ruling by the Supreme Court helps to clarify the Inheritance (Provision for Family and Dependants) Act 1975

What is reasonable financial provision for family members in your Will?

Yesterday’s judgement by the Supreme Court in the case of Ilott v The Blue Cross and Ors, overturned the Court of Appeal’s decision on reasonable financial provision and restored the original ruling in the case.

Mrs Ilott’s mother, Mrs Melita Jackson, had decided not to give her daughter anything in her Will and instead decided to leave her estate to a number of charities. Mrs Jackson went so far as to make a detailed statement when making her Will explaining why she did not want to leave anything to her daughter.

At the time of her mother’s death Mrs Ilott was in straitened financial circumstances but was not in any way financially dependent on her mother. Mrs Ilott therefore brought a claim against the estate in her capacity as a child of the deceased and the claim was for reasonable financial provision from the estate. The claim was made under the Inheritance (Provision for Family and Dependants) Act 1975.

Mrs Ilott won her case at first instance and was awarded £50,000. The Charities appealed and after a series of further hearings the award to Mrs Ilott was substantially increased.

The Supreme Court has now heard the final appeal and has stated that the initial award of £50,000 to Mrs Ilott should stand.

The Supreme Court has reminded us that although each of us is entitled to make a Will in whatever way we like, we do still have responsibilities for close family members, partners and others who are financially dependent on us.

A claimant must show they fall into one or other of those categories, and must also show that they are in straitened financial circumstances. That test is objective and it is no part of a successful claim merely to argue that it is not fair that someone has been left out of a Will.

In this case the Courts have felt that Mrs Ilott’s financial situation was such that on an objective test she needed reasonable financial provision. It has taken many years of argument, but it has now been decided that in this particular case that provision should be set at £50,000.

The case therefore reminds us that the 1975 Act may override a Will, however strongly the Testator feels and however reasonable the Testator feels their decision to be. In cases where a Testator wants to miss out a particular beneficiary who has a claim under the 1975 Act then care should be taken.

It might be that a compromise is the best way to proceed and the Testator makes a modest gift to that beneficiary possibly coupled with a clause in the Will which states that such a legacy will fail if the beneficiary makes any claim against the estate. Such clauses have to be carefully worded in order to be effective and care must be taken with the drafting of the Will as a whole.

For more information please contact our Wills and Probate team on 01733 882800.

Author

Paddy Appleton

Partner and Team Leader

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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.