Ilott v Miston – disinherited woman wins £164k

The case of Ilott v Mitson has been ongoing since 2007. The Court has changed its mind on how to approach this claim on several occasions, but the recent Court of Appeal decision has found that an estranged adult daughter of a Deceased’s mother’s estate was in fact a successful claimant to an Inheritance Act claim.

The initial reaction to this case is to curse and consider that the right to testamentary freedom of disposition is dwindling in England and Wales. However one needs to step back, consider the unusual facts of the case and wait to see whether an appeal is made to the Supreme Court…

What are the facts of the case?

Mrs Heather Ilott, from Hertfordshire brought a claim against her mother’s estate on the basis that she did not receive reasonable financial provision under her mother’s will.

Mrs Ilott’s father died before she was born and she spent the first 17 years of her life with her mother, Melita Jackson. When she turned 17, Mrs Ilott eloped with her boyfriend, whom she eventually married. Her actions caused a family fallout and the relationship with her mother broke down completely. Mrs Jackson executed a will in 2002 whereby she excluded Mrs Ilott from benefiting from her estate and instead left the residue of her estate to three charities: the RSPCA, the RSPB and Blue Cross (with whom she had little connection). Mrs Jackson also signed a Letter of Wishes, which contained a direction that her executors fight any challenge to the terms of her will.

Mrs Jackson died in 2004, at the age of 70. Her estate was worth approximately £486,000.

Mrs Ilott first brought a successful claim against Mrs Jackson’s estate in 2007 whereby she was awarded a £50,000 inheritance by a District Judge who had concluded that she was “unreasonably excluded” by Mrs Jackson.

This ruling was then reversed on appeal however on a subsequent appeal the Appeal Court Judges ruled Mrs Ilott was entitled to a share of the estate.

Mrs Ilott then appealed the quantum of the award, she wanted sufficient funds to purchase a property and an additional capital sum. The effect of the original award of £50,000 was that she would lose her state benefits and would be in a worse financial position than prior to the award.

In March 2014, Mrs Ilott’s appeal was dismissed. Mrs Ilott appealed again arguing that the District Judge had made a fundamental error in not considering the effect of the award on her financial position.

Lady Justice Arden, sitting with Lord Justice Ryder and Sir Colin Rimer, recently ruled that Mrs Ilott should receive a sum of £143,000 plus the costs of and expenses to fund the purchase of her home and an option to require the executors to pay her an additional sum not exceeding a further £20,000. The payment of the additional sum could be requested in instalments so that her benefits would not be affected.

What does this mean for you and your clients?

There is scope to conclude that this decision could have far reaching consequences for your clients in making it easier for adult “disinherited” children to challenge the terms of their parents wills and seek to claim greater sums by relying on the Inheritance (Provision for Family and Dependants) Act 1975. However, one must not forget the ability to bring a claim in this manner has always been there pursuant to this Act. The Court has a wide discretion to make an award once it has established that the criteria of the Act have been satisfied.

The facts of this case are unusual and the decision very much turns on those facts. On the question of whether she should be a successful claimant, Counsel representing Mrs Ilott ran the argument that she was “on the breadline” and that she could not afford things like holidays for the family, or brand new clothes for her children. She pulled on the heart strings of the Court and was successful against the backdrop that those benefiting under the will had no connection to the Deceased and therefore like Mrs Ilott, had not expected to inherit anything such that what they had was a windfall.

On the question of quantum, counsel for Mrs Ilot succeeded in arguing for an increased award and established that the Court needed to exercise its discretion in a way that would not ultimately make Mrs Ilott’s financial position worse. This resulted in the Court awarding a sum to purchase a property, and a sum which could be drip fed in order to keep within the disregards and capital thresholds for means tested benefits.

The decision does not change the law that one has freedom of testamentary disposition which allows one to disinherit estranged children. However, caution should always be taken when faced with a client wishing to do this and it is imperative that full advice is given to such clients, pointing out the risk of litigation for their estate and their beneficiaries. In addition, for those clients who wish to proceed with this course, the advice should be that they provide a detailed explanation in a side letter to the will explaining why they are excluding their children and detailing the connection to those that they intend to leave their estate to. If they want to leave the estate to charity then they should choose those to whom they have a connection or they should seek to establish that connection by engaging with the charities during their lifetime.

The usual approach of the Court in these cases is to assess the adult child’s age, earning capacity and ability to work for themselves. Consideration is given to the shortfall in any income which they have as well as the financial position of those inheriting. The Court then considers whether reasonable financial provision for the maintenance of the adult child has been made. The plea of true poverty in this case vs three large charitable organisations is an unusual scenario and it does not mean that the floodgates have been opened to adult children who have been disinherited.

Further information

This case highlights the importance of getting the right advice and having the proper documentation in place if you or your clients are thinking about disinheriting your children. To discuss the implications of this ruling further, please do not hesitate to contact Gaynor Jackson.