The legal position of adult children who make an Inheritance Act claim against their parents’ estates has been clarified by the Supreme Court in the long running saga of Ilott -v- The Blue Cross and others.
The original Inheritance Act claim
Mrs Ilott made a claim for ‘reasonable financial provision’ under the Inheritance (Provision for Family and Dependants) Act against the estate of her mother Mrs Jackson. Mother and daughter had been estranged for many years. Although Mrs Ilott and her family relied on state benefits Mrs Jackson decided to leave most of her estate to charity, making no financial provision for her daughter. Mrs Ilott therefore challenged the terms of her mother’s will, making an Inheritance Act claim.
The District Judge’s decision on the Inheritance Act claim
The District Judge at the original trial of the Inheritance Act claim agreed that Mrs Jackson’s will had failed to make ‘reasonable financial provision’ for her daughter and awarded Mrs Ilott £50,000.
The Court of Appeal’s decision on the Inheritance Act claim
The charities challenged the decision that ‘reasonable financial provision’ had not been made, but their challenge failed. Mrs Ilott herself also challenged the District Judge’s ruling on the basis that £50,000 was inadequate.
The Court of Appeal upheld Mrs Ilott’s appeal, concluding that the District Judge had made two errors:
- He limited the award because of the long estrangement between mother and daughter and because Ilott had no expectation of any benefit from her mother’s estate, but failed to indicate what the award would have been in the absence of these factors.
- He failed to consider what effect the award would have on Mrs Ilott’s benefits.
The Court of Appeal therefore set the District Judge’s award aside and gave Mrs Ilott £143,000 to purchase the house she lived in, together with an option to receive £20,000 in instalments. The new award was intended not to affect Mrs Ilott’s entitlement to state benefits
The Supreme Court
The charities appealed to the Supreme Court, which decided unanimously to restore the District Judge’s original decision on the basis that he had not made either of the errors alleged.
Clarification of the law on an adult child’s Inheritance Act claim
The Supreme Court reiterated that the matters which the court must consider when awarding ‘reasonable financial provision’ are listed under s.3 of the Inheritance Act. This limits ‘reasonable financial provision’ to what is reasonable for an adult child claimant’s maintenance. This does not extend to everything that is desirable for the claimant to have, but equally it is not limited to subsistence level either. The definition of maintenance is flexible and must be based on the facts of each particular case.
The judges agreed that ‘reasonable financial provision’ can include the provision of housing, but this would usually be achieved by creating a life interest.
The Supreme Court acknowledged the “unsatisfactory state of the law” which, it said, offers no guidance on the weight to be given to each of the section 3 factors when deciding if an adult child deserves reasonable maintenance. As a consequence court decisions will inevitably involve value judgments being made. The court recognised this could be problematic given the divergence of opinion in society about inheritance. It is therefore likely that Inheritance Act claims made by adult children will continue to be a thorny and contentious area, with outcomes difficult to predict with any degree of certainty.
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