Last week, the Supreme Court
brought to an end a 13 year legal battle over the late Mrs Jackson’s Will. The Will left virtually all of Mrs Jackson’s
assets (some £480,000) to three UK charities, cutting out entirely her only
child (Mrs Ilott), who was for many years estranged from her mother but who
lived in very financially straitened circumstances with her husband and five
children.
The Supreme Court’s
decision restores confidence in the will-making process. It provides an invaluable road map for anyone
tasked with advising a prospective will-maker whose Will provisions may prove
controversial to their family and any financial dependants, as well as for consolers
of disappointed children.
Mrs Ilott brought a claim against
the estate under the Inheritance (Provision for Family and Dependants) Act
1975. That Act allows certain categories
of applicants to apply for reasonable financial provision from a deceased UK
domiciliary’s estate. The potential
applicants under the Act include a child of the deceased but reasonable financial
provision is limited to ‘such financial provision as it would be reasonable in
all the circumstances of the case for the applicant to receive for his
maintenance’ (section1(2)(b)). The
District Judge, at first instance, awarded £50,000 out of the estate to Mrs
Ilott, in satisfaction of her 1975 Act claim but, on appeal, the Court of
Appeal awarded £163,000.
The Supreme Court (per the
judgment of Lord Hughes, with whom the rest of the Supreme Court Judges agreed)
acknowledged that the 1975 Act impinges upon testamentary freedom in the
UK. However, the concept of testamentary
freedom remains central to English law:
‘The law knows of no rule of automatic succession or forced heirship’
(paragraph 1).
The decision also recognised that
the long estrangement between the mother and daughter should be given due
weight. The 1975 Act states that, in
determining whether the deceased’s Will or the intestacy rules (if there is no
Will) make reasonable financial provision for the applicant under the Act, the
court is obliged to have regard to a number of matters, including the financial
resources and financial needs of the applicant, as well as those of the other
beneficiaries. The size and nature of
the estate and ‘any other matter, including the conduct of the applicant or any
other person, which in the circumstances of the case the court may consider
relevant’ (section 3(1)) are also taken into account.
The Supreme Court was critical of
the Court of Appeal’s view that the long estrangement counted for little:
‘It is not the case that once there is a qualified claimant and a
demonstrated need for maintenance, the testator’s wishes cease to be of any
weight. They may of course be
overridden, but they are part of the circumstances of the case and fall to be
assessed in the round together with all the other relevant factors…it was not
correct that so long and complete an estrangement was of little weight…care
must be taken to avoid making awards under the 1975 Act primarily awards for
good behaviour on the part of the claimant or penalties for bad on the part of
the deceased’ (paragraph 47).
The court confirmed that the
estrangement should limit the quantum of the award.
The judgment also provides useful
guidance on what maintenance means in practice.
It was noted that the concept of maintenance is broad but it should be
taken to mean an amount to meet the everyday expenses of living – neither
everything that would be desirable for the claimant to have but equally not
limited to a subsistence level of living.
Reference was made, with approval, to a claim by a married adult son
living in comfortable circumstances on a good income, whose claim to have his
mortgage paid off was refused (Re
Jennings, deceased [1994] Ch 286, per paragraph 14). Equally, the court confirmed that necessitous
circumstances are not, by themselves, always sufficient to justify a claim
under the Act. Maintenance should be
regarded as the provision of an income, albeit that a capital sum could be
awarded to provide the income stream. If
housing is needed to meet a claim for maintenance, the court noted that a life
interest would usually be awarded in preference to a capital sum. In Mrs Ilott’s case, many of her everyday
living expenses were being met by her state benefits. The £50,000 awarded was felt to be the
correct amount to enable Mrs Ilott to purchase essential white goods, basic
carpeting and curtains and replace worn out furniture in the family home. These were regarded as necessities for daily
living by the court and therefore meeting the requirement for maintenance. If the £50,000 award was used in this way,
Mrs Ilott’s capital would soon fall below £16,000 again, at which point her
state benefits would restart. The Court
of Appeal’s decision to award a capital sum to enable Mrs Ilott to buy her home
was rejected because her Housing Benefit was paying the bulk of her rent.
