The Inheritance (Provision for Family and Dependants) Act 1975 gives the court the power to make orders where the deceased individual failed to make reasonable financial provision to a dependant upon their death. Claims under the Inheritance Act are often made by children of the deceased, or by surviving spouses. In deciding the outcome of such claims, the court must take into account competing interests. On the one hand, the court must consider that the deceased has the right to leave their assets to whomever they wish. On the other hand, the court can and should intervene when it is clear that the deceased has failed to make adequate financial provision (or failed to make any financial provision) for a dependant.
The recent case of Ilot v Mitson and Others highlights how the court exercises its discretion in deciding claims under the Inheritance Act. Mrs Melita Jackson died in 2004. Mrs Ilot was her only child. Sadly, Mrs Jackson and her daughter were estranged from 1978 onwards. Despite several attempts at a reconciliation between the parties, they remained estranged up until the death of Mrs Jackson.
In 2002, Mrs Jackson made a Will. Within this, she made no financial provision for Mrs Ilot, nor any provision for Mrs Ilot’s five children or her husband. The entirety of Mrs Jackson’s estate was left to various charities, including the RSPB and RSPCA. It was accepted by all involved that Mrs Jackson had not enjoyed any connection with the various charities during her lifetime. Unsurprisingly, Mrs Ilot made a claim under the Inheritance Act following the death of her mother.
By August 2007, Mrs Jackson’s estate was valued at £486,000. The circumstances of Mrs Ilot and her husband were extremely modest. They did not own a property and were renting. They had no savings. Their total combined annual income including state benefits was less than £19,500. Mrs Ilot was in her 50s and had no pension to look forward to upon retirement.
Following a hearing before a District Judge, Mrs Ilot was awarded £50,000. This sum was awarded to her on the basis that she had previously been living within her means and such an award, capitalised over time, equated to around £4000 per year. She appealed against that decision and the case eventually came before the Court of Appeal in July 2015.
The Court of Appeal agreed that the decision of the District Judge was unfair. They found that the District Judge had made an error in limiting his award purely because Mrs Ilot had been living within her means. The fact that Mrs Ilot was estranged from her mother and had no expectation of receiving anything from the Will should also be discounted. Moreover, they found that the District Judge had not considered that a capital sum of £50,000 awarded to Mrs Ilot would actually lead to a reduction in her state benefits. She would therefore be worse off under the order of the District Judge than if there had been no award in her favour at all.
The Court of Appeal noted that because Mrs Ilot was reliant on state benefits to supplement her income, the practical effect of any alternative award in her favour had to be carefully considered. In essence, the only real way to protect her ability to claim state benefits would be if she was awarded enough capital to enable her to purchase a property for herself and her husband. The Court of Appeal awarded her £143,000 to purchase a property as a result. They also gave her the option of claiming a further capital sum of £20,000, should she wish to do so. Claiming such a sum would impact on what she received by way of state benefits but it was down to her as to whether she wanted to make that decision.
If you are worried over the terms of your own Will, or believe that you may have a claim under the Inheritance Act, we are here to help.