The Ilott Case and its Impact on Inheritance Act Claims

Testamentary freedom is, and has always been, an important principle in the English Courts unlike many other jurisdictions. In the 1990 case of Re Coventry, Mr Justice Oliver famously said “an Englishman still remains at liberty at his death to dispose of his own property in whatever way he pleases”. This includes choosing not to benefit certain people in your will, including family members.

The Inheritance (Provision for Family and Dependants) Act 1975 (“the Inheritance Act”) does however provide a certain safety net in these scenarios. It enables a spouse/civil partner, former spouse, child or dependent of a deceased person to apply to the Court if they believe that they have not received reasonable financial provision from the deceased’s estate. Without considering spouses/civil partners, which is a different issue, the Court consider a fairly wide range of factors when considering whether or not an award should be made as the test considers what is reasonable for the person’s maintenance. These factors include the person’s own financial resources, their financial needs as well as those of the other beneficiaries of the estate and any obligations that the deceased themselves may have had towards the person bringing the claim. On the one hand, this gives the Court the freedom to look at each case on its own facts but it is an expensive process incurring significant risk for a potential claimant pursuing a claim to trial, without being able to predict the outcome with any real accuracy.

It is for this reason that the judgment in the case of Ilott v Blue Cross and others was so keenly awaited. It was the first time that the Inheritance Act had been considered by either the House of Lords or the Supreme Court.

The Facts

Very briefly, this claim was brought by an adult daughter (Mrs Ilott, an only child) living in difficult financial circumstances who, despite having been estranged from her mother for a significant period of time, believed that she should have been included in her mother’s will. The majority of her mother’s estate, valued at approximately £486,000, was left to various charities.

At the first hearing, it was held that Mrs Ilott should receive something from her mother’s estate and she was awarded the sum of £50,000 which was determined to be reasonable for her maintenance. This decision was appealed by the charities and the High Court decided that it was perfectly reasonable for Mrs Ilott to receive nothing from her mother’s estate as this was her mother’s wish.

Mrs Ilott took this decision to the Court of Appeal. The decision of the High Court was overturned and the case was sent back to the High Court to reconsider how much it was reasonable for Mrs Ilott to receive. The High Court held the earlier court’s decision and awarded a sum of £50,000. Mrs Ilott then appealed that decision, which resulted in the Court of Appeal rather generously increasing the award to £163,000. They determined that an appropriate sum for Mrs Ilott’s maintenance would be a sum enabling her to purchase her own house, which at the time was valued at £143,000. She was also granted a further £20,000. This award was subsequently appealed by the charities in the Supreme Court, where the original award in the sum of £50,000 was restored. The court reiterated the fact that the Inheritance Act requires an assessment of what ‘reasonable provision’ should be made, not a hypothetical standard of provision. It was determined that this sum would be sufficient for Mrs Ilott – it would enable her to carry out some urgent home improvements, purchase some necessary items and also go on holiday. The Supreme Court recognised that the award made would soon be depleted below the level resulting in Mrs Ilott losing certain state benefits. Although Mrs Ilott would have been able to purchase her house as a result of the decision made by the Court of Appeal, the fundamental point was that her housing needs were primarily met by housing benefit, which would continue, and responsibility for the building’s fundamental repairs did not lie with Mrs Ilott but rather with the housing association landlord. This was therefore seen to be reasonable financial provision, albeit those needs being met by the state.

What can we take from this decision?

So what impact will this decision have on claims brought under the Inheritance Act, particularly those brought by independent adult children? Is the outcome any clearer after the recent judgment handed down by the Supreme Court? These claims are and will always be very fact-specific, which is not helped by the fact that the Inheritance Act does not itself give any guidance as to the weight to be applied to the various factors set out. Lady Hale reiterated this by referring to “the unsatisfactory state of the present law”, also noting that any of the three outcomes set out above could be seen as reasonable conclusions which the judge hearing the case to begin with could have reached.

Notwithstanding the above, if nothing else, the judgment handed down by the Supreme Court reiterates the fact that applications brought under this act are to provide maintenance and not capital. The Supreme Court also clearly recognised how relevant the Testator’s own wishes were, taking these into account in addition to the lengthy period of estrangement between mother and daughter. It was not up to the charities themselves to justify their needs. They were the named beneficiaries in the Testator’s will. Fundamentally it was for Mrs Ilott herself to demonstrate the will’s failure to make ‘reasonable provision’ and thereafter to persuade the court that what she was seeking was reasonable when looking at the provisions of the Inheritance Act itself.

The Ilott case demonstrates the difficulty that independent adult children have in bringing a claim under the Inheritance Act and the difficulties faced in predicting the outcome of such a claim. For such claims to be successful, it would appear that something ‘extra’ needs to be demonstrated – perhaps a moral argument. For now at least, the principle of testamentary freedom remains sacrosanct.

How to contest a will

If you need advice on contesting a will, please contact our contentious probate team on 01494 790047 or email amanda.melton@ibblaw.co.uk.