Important Supreme Court Ruling on Inheritance
On 15th March the Supreme Court published its long awaited judgement in the case of Ilott v The Blue Cross and others.
English Law recognises the freedom of individuals to leave their estate to whoever they choose. The only exception would be in circumstances covered by the Inheritance (Provision for Family and Dependents) Act 1975. This legislation enables the court to modify a will or the effect of the intestacy rules if they are satisfied that the will does not ‘… make reasonable financial provision’ for a small, specified group of people. The judgement in the Ilot case makes clear the limitations on the power the court has to interfere with the rights of an individual to dispose of their assets by will after death.
In this case the estranged daughter of the deceased made a claim under the Act because her mother had made no provision at all for her and instead left the bulk of the estate to charities. The case was heard initially in the County Court whose decision to award £50,000 was challenged in the Court of Appeal and the award increased to £140,000 to enable Mrs Ilot to purchase her housing association property. It was finally heard in the Supreme Court in December 2016.
The Supreme Court’s judgement made clear that in the case of an adult child the court’s powers were limited to awarding what it would be reasonable for someone to receive for ‘maintenance’ only. It was never intended that the court could simply re-write a will that it or others considered unfair. The court gave some guidance as to what might be considered ‘reasonable provision’ and concluded that it could include the provision of housing but that this ordinarily would be by way of a ‘life interest’ in a property (the applicant could benefit from housing during their lifetime but with the capital reverting to other beneficiaries upon death).
The guidance from the Supreme Court goes some way to confirming how the legislation works, but also makes clear the principle that we are all free to choose who will benefit when we die.
There can be many reasons why an individual may choose to disinherit a family member, however, despite this ruling, the court still has powers to vary the will. Therefore, anyone wishing to do so would be well advised to explain their reasoning in a letter stored with their will!
Ian Oliver. Partner, dispute resolution.General, George Ide, News, Private Client, Wills and Probate