Forced Heirship ushered in by the Court of Appeal –is your Will worth the paper it is written on?

Forced Heirship ushered in by the Court of Appeal –is your Will worth the paper it is written on?

This case has cast significant doubt over the long held position that those making a Will in England and Wales have complete testamentary freedom and do not need to benefit their close relatives if they do not wish to do so.

Mrs Jackson (the deceased) and her daughter, Mrs Ilott, had been estranged for 26 years after Mrs Ilott left home aged 17 to live with, and later marry, a man whom her mother did not approve of.

The court found that Mrs Jackson had acted in an "unreasonable, capricious and harsh" way towards her daughter in leaving all of her £486,000 estate to charity.

Mrs Ilott applied under the Inheritance (Provision for Family and Dependants) Act 1975 for reasonable financial provision and at first instance was awarded £50,000.

Mrs Ilott appealed and was awarded £143,000 to enable Mrs Ilott to purchase her housing association house (plus the reasonable costs of purchase) and payments up to a maximum of £20,000 structured in a way that would allow Mrs Ilott to preserve her state benefits.

The charities are now appealing this decision to the Supreme Court.  The issues for the Supreme Court to consider are: 

1.  Whether the Court of Appeal was wrong to set aside the award made at first instance

2.  Whether the Court of Appeal erred in its approach to the 'maintenance' standard under the 1975 Act.  The Court of Appeal's approach was first to decide whether the current living standard was sufficient. It explained: 'This is the correct test, and the court's assessment should not be motivated by a desire to provide an improved standard of living as opposed to a desire to meet appropriate living needs. Nor on the other hand is the court bound to limit maintenance to mere subsistence level.' The Court of Appeal had determined that Mrs Ilott's income was not reasonable financial provision for her maintenance.

3.   Whether the Court of Appeal was wrong to structure an award under the 1975 Act in a way which allowed the respondent the preserve her entitlement to state benefits.   On this point the Court of Appeal had said: 'what the court has to do is to balance the claims on the estate fairly. There is no doubt that, if the claimant for whom reasonable financial provision needs to be made is elderly or disabled and has extra living costs, consideration would have to be given to meeting those...the same applies to the case where a party has extra financial needs because she relies on state benefits, which must be preserved.' 

The Court of Appeal case generated a lot of debate at the time.  Many commented that the case made it easier for adult children who had been excluded from their parent's will (and who had not been left reasonable provision) to mount a challenge under the Inheritance Act.  If the Supreme Court allows the charities' appeal will this make such claims more difficult?

We will be watching the outcome of the appeal with interest.

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