A recent decision that saw the Court of Appeal award a disinherited daughter £163,000, has caused many clients concern over their own wills, in particular, their decisions to favour certain relatives or to exclude others entirely. Keystone’s Wills and Probate specialist Rose Phelps shares her thoughts on the future of wills after Ilott v Mitson.
Generally, it is assumed that English law provides everyone with the choice over who should benefit in their will. In England and Wales we do not have a system of “forced heirship”, giving certain relatives an entitlement to a defined share of an estate. On the other hand, since the 1930s we have had a body of statute and case law giving some individuals the right to claim “reasonable financial provision” from the estate. The main statute is still the Inheritance (Provision for Family and Dependants) Act 1975, with several subsequent amendments. It is worth repeating that individuals only have the right to make a claim and the legislation does not simply give them a share of the estate. Claims that are made are not necessarily successful, but they are time consuming and expensive to deal with, even if ill-founded or malicious. This is often what someone means when they say they want to “contest” a will – they feel that the will is unfair to them and they want to make a claim.
The facts of the Ilott –v- Mitson case ( EWCA Civ 797) are these. Mrs Jackson died in 2004 having been estranged for 26 years from her only child, a daughter who had left home to marry Mr Ilott. They went on to have 5 children and lived in very reduced circumstances. The will, made in 2002, left a small legacy to one charity and divided the residue of the estate between two more charities with no provision at all for her estranged daughter or grandchildren. The charities were all well–known national animal charities.
The Court of Appeal awarded a sum for the daughter to buy her own home and up to £20000 for immediate needs (total award £163,000 out of a net estate of £486,000). The Court’s power is actually to make a “maintenance” award but their argument was that by giving her capital to buy a house the daughter was relieved of a need to find rent which was a “maintenance” outgoing. The judge at first instance had decided that in view of the daughter’s “obviously straitened and needy financial circumstances” the will did not make reasonable financial provision for her. There were also comments about the charities getting a “windfall” so that their financial position did not have to be balanced against that of the daughter. The Court of Appeal examined other factors as well, such as the lack of obvious lifetime connection with the charity beneficiaries in the will, and Mrs Jackson’s wishes. The Court of Appeal took the opportunity to review how such claims should be considered by the courts.
Some successful claimants in the recent past have had some continuing physical or mental health issues to contend with, or some other factor that made their exclusion from the will hard for the Court to countenance, but what are solicitors to tell clients now? Should every parent provide equally for each child to avoid the risk of litigation? Should an only child always get all or most of the estate? Will widespread newspaper coverage mean more disaffected relatives threaten a claim, in the belief they are entitled to something come what may? Would the Court’s decision in Ilott have been different if the will had benefitted other close relatives or friends rather than charities, and animal charities at that? How can we advise clients making a will in order to deter potential claimants? The facts of Ilott –v- Mitson and the reasons the judges gave for their decision may help us see some way forward.
How to ensure your wishes are respected
The advice to anyone making a will which treats a relative less generously than usual (whatever “usual” means) might now be as follows:-
- Make a valid will. The rules of intestacy, where no valid will is in place, set out which blood relatives inherit what share. The deceased’s wishes have no effect where there is no will in place.
- Review your will regularly and take advice on the current legal position. Record that review, as well as your reasons and decisions formally, e.g. place a signed dated note to that effect with your will even if you don’t update the will itself. If you take legal advice to help with the review, your solicitor should also make and keep a file note of the meeting and your decisions.
- When making or updating your will, leave a note of your reasons with the solicitor and in a sealed letter for the executors to produce if need be (ideally kept with the will) and tell everyone appropriate your reasons. If you have had correspondence about the family situation keep that with the will too e.g. acrimonious letters or emails. Such information is not part of the will but gives information/ammunition to your executors to contest a claim after your death when your decisions may be questioned.
- Some clients like to put their reasons in the will itself. This does mean the reasons are clear to all but as the will is a public document once filed at the Probate Registry after a death, harsh words can sometimes backfire. A child who did not expect a share of the estate may be furious at the way this falling out is made public by the will, prompting them to make a claim they would not otherwise have made.
- Treating everyone equally to avoid a claim, whether you approve of relatives or not, may not be the answer however –doing that is not what you want to do or feel is right and it may not be fair to the relatives you feel do deserve your generosity. The emotional upheaval, potential costs and risk of losing may put off disappointed beneficiaries or encourage them to settle for a modest payment. Even if they do make a claim. They may not expect anything or may not have the resolve or the resources to make a claim and you may have left them a share unnecessarily. On the other hand being remembered in a will can dissuade some beneficiaries from making a claim for more. You know your family better than we do and there is not a universal answer.
- Be frank about your reasons– e.g. habitual or previous drug use, dishonesty, spendthrift nature etc. Heartfelt reasons are more important than reasons the Court objectively agrees with, and there is little use saying, as in one will I read recently, “My reasons are known to me”, when they aren’t known to anyone else. And saying “because they don’t need it” is unhelpful when by the time of the death they do need it.
- Make more sophisticated provision for them in the will e.g. for someone who you love but who is a spendthrift, you may want to provide for him/her through a trust, rather than by a direct gift. Trusts can be cumbersome and expensive to run but they are worth exploring. The Court may well accept that a trust which can benefit someone means you have made reasonable financial provision for them.
- Are your children adults, financially independent and autonomous yet? If not, then bear in mind that making little or no provision at all may be seen by the Court as a flawed decision. But this doesn’t mean you have to leave assets direct to the child without an intermediary (the trustees) to look after them.
- If you cut out a child or give them less than their siblings, who benefits? It now appears from Ilott –v- Mitson it is wise to benefit others who have a good claim on your generosity and have a demonstrable connection with you. This might be other close relatives. It is easier to justify a gift to a charity if you are a regular donor or volunteer or have shown an attachment that your executors know about, than if you pick a charity at random. The Court in Ilott –v- Mitson questioned the deceased’s connection with the charity beneficiaries of the will, so record in a document or indeed in the will why you have chosen the charities you have, when excluding relatives.
- If you can afford it, make lifetime gifts to the beneficiaries you do like rather than waiting for others to squabble over your estate (but take advice before doing so.)
- Equally, don’t provide lifetime gifts or support to the relatives you don’t like. This may raise expectations and/or facilitate a claim.
Cases such as Ilott –v- Mitson are making new law and reminding us of the old law, so reviewing wills regularly (with advice) becomes ever more important, particularly where family relationships are strained.
This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.