Increase in legacies in Wills, increase in legacy disputes?

The law

The Inheritance (Provision for Family and Dependants Act) 1975 (the 1975 Act) enables certain categories of persons to make a claim against an estate provided they can show that they were financially dependent on the deceased and that the deceased did not make adequate provision for them in their Will. Any claim under the 1975 Act must be made within six months of the issue of the Grant of Probate.

The following categories of persons are eligible to make a claim under the 1975 Act:

• A current spouse or civil partner of the deceased;
• A former spouse or civil partner of the deceased who has not remarried and who has not received a final financial settlement following the breakdown of the marriage or civil partnership;
• Any person who, during the whole two year period immediately before the date of death, was living in the same household as the deceased in the manner of a spouse or civil partner;
• Any child of the deceased including illegitimate, legitimated and adopted children of any age;
• Any person treated by the deceased as a child of the marriage or civil partnership;
• Any person not included above who was maintained wholly or partly by the deceased immediately before his death otherwise than for valuable consideration. The requirement of ‘no consideration’ excludes paid domestic staff from having a claim under the Act.

The court will take into account the following factors when deciding whether a reasonable financial provision has been granted for a claimant:

• the financial resources and needs of the applicant;
• the financial resources and needs of any other applicant;
• the financial resources and needs of the beneficiaries;
• any obligations and responsibilities of the deceased towards any applicant and any beneficiary;
• the size and nature of the estate of the deceased;
• any physical or mental disability of any applicant or beneficiary;
• any other matter, including conduct, which the court may consider relevant.

In relation to an application by a surviving spouse, the court is also required to consider:

• The age of the applicant and duration of the marriage;
• The contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family.

Case study

The most high profile 1975 Act claim involving a charity is the case of Illot v The Blue Cross and others [2017] UKSC 17. In Ilott, the deceased left the majority of her net estate (worth £486,000) to three charities and made no provision for her only daughter. Her daughter, herself a 50-year-old married mother of five reliant on state benefits to make up three-quarters of the family income, contested the will despite having been estranged from her mother for over 30 years. The deceased could not have been more clear in her wishes to disinherit her daughter.

At first instance, the District Judge concluded that the deceased did not make reasonable financial provision for her daughter and awarded the applicant £50,000. The applicant appealed this decision, on the basis that the award was too small, resulting in the decision being overturned and a finding in favour of the three charities. The applicant appealed again and the Court of Appeal once again ruled in her favour remitting the case back to the High Court to determine the issue of quantum. The three charities appealed this decision and the Supreme Court subsequently found in favour of the charities and reinstated the award of £50,000 made by the District Judge at first instance.

Lord Hughes (who gave the lead judgment) said “charities depend heavily on testamentary bequests for their work, which is by definition of public benefit and in many cases will be for demonstrably humanitarian purposes. More fundamentally, these charities were the chosen beneficiaries of the deceased. They did not have to justify a claim on the basis of need under the 1975 Act, as Mrs Ilott necessarily had to do.”

Top tips for charities

1. Be mindful of the importance of testamentary freedom.
2. Keep detailed and accurate records of lifetime support, whether financial or otherwise.
3. 1975 Act claims can be unpredictable, alternative dispute resolution (particularly mediation) should be considered from an early stage.