Following on from our festively-titled article “No, not Donner and Blitzen… Ilott and Mitson”, published just before the appeal in this long running case was heard by the Supreme Court, judgment in the appeal was handed down this morning.
As discussed in our previous article, this is the first time the Supreme Court has had the opportunity to make a ruling on the “maintenance” standard under the Inheritance (Provision for Family and Dependants) Act 1975. Before discussing what the Supreme Court decided, and the significance of its decision, we summarise the background which gave rise to this appeal.
This case centres on a deceased mother, Mrs Jackson, and her daughter Mrs Ilott. Mrs Ilott had been estranged from her mother for a period of approximately 26 years since she left the family home at the age of 17. She lived with her husband and five children in a housing association property and they were heavily dependent on state benefits for their day to day expenses.
When Mrs Jackson died she left her entire net estate of £486,000 to various charities with no provision whatsoever for her only daughter. Mrs Ilott made an application under the Inheritance (Provision for Family and Dependants) Act 1975 claiming reasonable provision for her maintenance had not been made in her mother’s Will. When determining an application under the 1975 Act, the Court should not consider the moral grounds for making provision but rather the objective financial grounds.
In the first instance, back in August 2007, District Judge Million decided that insufficient provision was made for Mrs Ilott and awarded her the sum of £50,000 from the estate. The limited amount of the award reflected the fact that Mrs Ilott had managed to live on limited funds for a number of years before the death of her mother. However, the level of the award actually had the effect of making Mrs Ilott poorer because the amount she gained from the award was outweighed by the amount she subsequently lost in state benefits.
Mrs Ilott appealed the amount of this award to the High Court but her appeal was rejected. Not to be deterred, Mrs Ilott appealed to the Court of Appeal and was rather more successful. The Court of Appeal concluded that the District Judge had been incorrect in his award. In considering the matter afresh, the Court of Appeal decided that the fact Mrs Ilott had previously lived in taut financial circumstances was not conclusive when determining the level of the award and estrangement from her mother should not count against her due to the difficulty in apportioning fault.
The Court of Appeal made an award of £143,000 to enable Mrs Ilott to buy a home as well as a further capital sum of £20,000. This award was hugely significant for the impact it created on testamentary freedom, specifically in making provision for an independent adult child.
The Supreme Court’s judgment on the matter was handed down this morning and, in short, the charities’ appeal was allowed and the first instance decision awarding Mrs Ilott £50,000 was restored. The Supreme Court also highlighted (a) the significance of testamentary freedom and that the estrangement between the testatrix and her daughter was not of “little weight”; and (b) the notion of maintenance is “broad” but must provide everyday living expenses; and (c) housing maintenance will normally be satisfied by way of a life interest rather than a capital sum. Lady Hale highlighted the ‘unsatisfactory state of the present law, giving as it does no guidance as to the factors to be taken into account in deciding whether an adult child is deserving or undeserving of reasonable maintenance’. We expect the decision will have ramifications for many testators and, more directly, for adult children bringing (or defending) a claim under the 1975 Act.
If you wish to discuss a potential claim against an estate, or need to defend such a claim, please contact our Probate Disputes Team on 01603 281195 who can provide expert advice.