A new frontier in the boundary between professional and private life – solicitors’ undertakings
The Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”) provides that adult children are entitled to apply for reasonable provision from the estate of a deceased parent.
We have noticed a steady increase in claims by children under the Act, often in circumstances where a parent has married for a second or third time or has co-habited with a new partner for more than two years. In such cases, there is invariably distrust or dislike between the children and the surviving step-parent. Indeed, there is also often animosity between step-brothers and step-sisters, who are concerned to ensure that they receive what they perceive as a fair share of their parents’ estate. There is sometimes the added complication that the deceased parent may have made a greater financial contribution to purchase assets which form part of an estate, including property, than the step-parent.
These factors all go towards increasing the risk of inheritance disputes, particularly claims by disgruntled children.
In considering a claim under the Act, a Court must have regard to the following factors as outlined in section 3(1) of the Act:
a. the financial resources and needs of the applicant;
b. the financial resources and needs of any other applicant;
c. the financial resources and needs of the beneficiaries;
d. any obligations and responsibilities of the deceased towards any applicant and any beneficiary;
e. the size and nature of the estate of the deceased;
f. any physical or mental disability of any applicant or beneficiary;
g. any other matter, including conduct, which the court may consider relevant.
Until recently expectations of success for adult children in such cases were limited (primarily due to the difficulties faced by claimants in demonstrating that they should be provided for by someone other than themselves). However the more recent Court of Appeal decision in Ilott v Mitson & Ors (“Ilott”) has caused some to question whether the possibility of adult children making successful claims under the Act could significantly impinge on the future of testamentary freedom in England and Wales.
In the case of 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. 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 but remitted the case back to the High Court to determine the issue of quantum (this has not yet been determined).
The deceased could not have been more clear in her wishes to disinherit her daughter, going as far as to leave a letter of wishes reinforcing that her daughter should receive nothing from the estate. Given that a parent is under no obligation to leave anything to their children, and until this point the courts have done little to suggest otherwise (in the case of adult children), it is easy to see why many feel that the decision in Ilott may have opened the door for more claims by adult children under the Act.
In my view, the decision in Ilott has changed very little; the Court of Appeal in fact emphasised the need to follow closely the words of the Act removing any earlier questions as to whether the deceased had a moral obligation to leave money to their children, or whether they ought to have done, and concentrated on whether the provision made for the applicant was reasonable.
Central to this question were the competing needs of the beneficiaries and given that in Ilott the Court had to weigh up the needs of a mother of five partly dependant on state benefits against that of a charity with no individual discernible need it is perhaps easier to understand why it was decided that it was reasonable to make at least some provision for the applicant. However it should also be remembered that the size of the award at first instance was comparatively small and whilst it remains to be seen whether the High Court will increase this amount it is indicative of the courts current views about overriding a testator’s wishes.
The reality is that these claims will continue to be difficult for adult children and should be pursued with caution. Adult children living at home and those that were financially dependent on a deceased parent will always stand a much better chance of success under the Act than those that maintain themselves financially. It will be fact sensitive in every case and will depend on the factors outlined in Section 3(1) of the Act.
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