Further to our article on 21 February 2011 we now have the Court of Appeal’s decision in the Inheritance Act case of Heather Ilott v David Mitson (& 4 others).
Background
The claim was brought by Heather under the Inheritance (Provision for Family & Dependants) Act 1975 for reasonable financial provision from her mother, Melita’s, estate. Heather had been written out of Melita’s Will with the entire estate passing to three animal charities as a result of years of disagreement and estrangement.
Heather’s inheritance claim was originally heard in 2007 when the District Judge ordered that it was unreasonable for Melita to exclude Heather from her Will despite the fact the Will was accompanied by a ‘letter of wishes’ explaining why she had excluded Heather as a beneficiary from her estate. The Judge awarded Heather £50,000 from her mother’s £486,000 estate.
Heather appealed the decision to the High Court on the basis that £50,000 was an insufficient sum to meet her needs. However, instead of increasing the award the High Court ruled in favour of the charities’ cross appeal, which meant that Heather’s claim under the 1975 Inheritance Act was dismissed and she was awarded nothing.
Heather then appealed this decision to the Court of Appeal, arguing that the High Court Judge had made an error in overturning the District Judge’s decision.
The Court of Appeal’s Decision
On 31 March 2011 the Court of Appeal ruled in favour of Heather and agreed that the High Court Judge was wrong to overturn the District Judge’s earlier decision.
The three Court of Appeal Judges listened to the arguments put forward by the charities that:-
- The District Judge asked himself the wrong legal question to determine the facts of the case;
- The District Judge did not weigh all of the section 3 factors of the 1975 Inheritance Act in the balance when deciding whether it was reasonable to exclude Heather and instead focused merely on her need for the inheritance;
- If the Judges were to allow Heather to succeed in her claim it would undermine a testator’s freedom to dispose of their estate as they wish and it would require solicitors who draft Wills to make enquiries of the financial circumstances of a testator’s children before they could advise them.
The Court of Appeal Judges decided that:-
- The District Judge asked himself the correct legal question in looking at whether the facts created an “unreasonable result” (as previous cases required him to do) rather than whether Melita’s conduct in excluding Heather was unreasonable (which the charities argued he had done).
- The District Judge was entitled to weigh up the facts put before him at the original hearing in 2007 and decide whether the section 3 factors “tipped the scales” so as to create an unreasonable result for Heather.
In weighing up the facts the District Judge did not merely focus on one of the section 3 factors (Heather’s need for the money) but instead he weighed up all of the factors including the size of the estate, the charities’ contrasting need for the money and Melita’s conduct towards Heather. He found those factors outweighed other factors such as Heather’s conduct towards Melita.
In making an overall judgment on whether the facts proved that there was an unreasonable result for Heather, The District Judge had to make a “value judgment”. In doing so he decided that:-
a) Heather was entitled to make her life with her partner (and later husband) and to have a family of her own away from her mother.
b) It was reasonable for Heather to remain at home, rather than working, having done so during her marriage whilst her 5 children were growing up.
c) Families were not all to be blamed for their lack of income which makes a claim for tax credits necessary and possible.
The Court of Appeal stressed the importance of allowing Judges who preside over a trial to make that “value judgment” as they are the ones who hear all of the witnesses and full facts of the case. They made it clear that appeal court Judges should not interfere with those value judgments unless it can be proven that the trial Judge asked himself the wrong legal question or paid attention to the wrong facts.
As the District Judge did not do either of these things in this case his original ruling that reasonable financial provision had not been made for Heather was upheld.
3. As the District Judge did weigh up all of the section 3 factors, and not just Heather’s need for the money, he acted in accordance with the 1975 Inheritance Act which was created for the very purpose of changing the terms of a testator’s Will where those terms are unreasonable in all of the circumstances. This will not be done flippantly but upon a careful consideration of whether all of the section 3 factors make it reasonable to do so.
Further, Parliament has reviewed this legislation on a number of occasions over the years resulting in specific removal of restrictions upon adult children bringing a claim under the 1975 Act, even if it was possible for them to subsist without a successful inheritance claim being made.
The case is now being referred back to a different judge at the High Court to decide whether the £50,000 was the correct amount to award Heather or whether, as she argues, she should receive more.
Conclusion
The Court of Appeal’s decision means that parents should not unreasonably exclude their children from their Wills.
It is clear that if a parent making a Will fails to make reasonable provision for their children, the Court will be prepared step in to put things right – even where they expressly exclude the children from their Will and provide reasons for doing so.
Although Heather has been successful so far she should beware the risk of a pyrrhic victory as there is always the chance that the High Court will conclude that whilst it was unreasonable to exclude Heather from the Will she should have less than the £50,000 she was originally awarded. There is also the extent of the legal costs and solicitors fees to consider. Indeed the Court of Appeal Judges have recommended that the parties try to settle this last issue rather than taking the matter to a fourth hearing.
Our Recommendation for Adult Children Contemplating An Inheritance Act Claim
If you are an adult child, or any other eligible claimant under the Inheritance (Provision for Family and Dependants) Act 1975 and you think that you may have a claim, then please do not hesitate to speak to one of our specialist contentious probate solicitors for a free initial assessment of your claim. Slee Blackwell solicitors are experts in dealing with inheritance Act claims and can advise people making a Will as well as potential claimants under the Act. We have a range of funding options available, including Legal Aid (public funding) and No Win – No Fee (conditional fee agreements) for claimants.
Call us on freephone 0333 888 0407.