Legal update: Is your will your will?

Summary

In a significant ruling, the UK Court of Appeal’s decision in Ilott v Mitson 2015 has ruled against the presumption that you can do with your estate what you wish. This decision has seemingly broadened the Court’s power to intervene where an adult child applicant’s interest in the estate has been limited or excluded.

This case concerned the Will left by a Mrs. Jackson after her death in June 2004. Mrs. Jackson was survived by her only child, the Plaintiff Mrs. Ilott, from whom she had been estranged for 26 years. Mrs. Jackson left the entirety of her estate worth GBP486,000 to be split between 3 animal charities. Mrs. Ilott was specifically and intentionally excluded, as set out in a letter written by Mrs. Jackson to be read in the event that her Will was contested by her daughter.

Relevant legislation

The UK Legislation governing this area of law is the Inheritance (Provision for Family and Dependants) Act 1975, sections 1-3.

The corresponding relevant legislation in Hong Kong is the Inheritance (Provision for Family and Dependants) Ordinance (Cap. 481), sections 3-5.

Chronology of court decisions in case and legal test

From the time of Mrs. Ilott’s initial claim in 2007 to the Court of Appeal’s final decision on the value of the claim, the case had a somewhat complicated chronology.

Mrs. Ilott’s original claim was heard in 2007, where, inter alia, Mrs. Ilott’s strained financial position led the Court to decide that it was not reasonable for her to have been excluded from the estate. Mrs. Ilott was awarded GBP50,000 from the estate, and believing this was not enough, appealed this decision to the High Court, and the charities cross-appealed. The Court only heard the charities’ appeal, overturning the original decision leaving Mrs. Ilott with nothing from her mother’s estate.

In 2011, the Court of Appeal heard Mrs. Ilott’s second appeal, ultimately upholding the first Judge’s decision. The case then returned to the High Court which then dealt with the matter of quantum once again. In 2014 the High Court reinstated the original GBP50,000 award, and Mrs. Ilott appealed yet again to the Court of Appeal, this time on the issue of quantum.

In a landmark decision in July 2015, the Court of Appeal awarded Mrs. Ilott GBP164,000, amounting to approximately one third of the entire estate. The amount was broken down into what it would cost Mrs. Ilott to buy the house she was living in plus associated costs (GBP143,000 + GBP1,000), and an additional GBP20,000 for her future needs.

The Court of Appeal identified a number of errors in the first instance Judge’s decision to award Mrs. Ilott only GBP50,000, highlighting the following key principles to be used in making such decisions:

• The amount of the award should not be limited to merely allow the adult child claimant to make ends meet. In this case the Court of Appeal found that Mrs. Ilott was entitled to a greater sum due to the fact that her present income imposed great restrictions on her current and future needs. Despite this, the Court noted that it is not the Court’s place to set out to improve an adult child claimant’s standard of living.

• Mrs Ilott was living off state benefits, the value of which the first instance Court had not properly considered. The first Judge had made some assumptions about, but had not properly explored the effect of the award on Mrs. Ilott’s pension. The Court of Appeal Judges also noted that a person’s current standard of living was not indicative of the standard at which they are entitled to be maintained, however Mrs. Ilott’s current income was a significant determining factor in the Court’s decision.

• The Court calculated the additional GBP20,000 awarded for future needs on the basis that it would sufficiently provide for potential medical or other future costs, in addition to the options she had by way of equity release should she need further funds in the future. It was kept to this modest amount as the Court also took into consideration the fact that Mrs. Jackson had explicitly sought to exclude her daughter from her estate, and that the two had been estranged for some time.

What this could mean for testators/beneficiaries/potential claimants

Charities to which money is bequeathed in contested wills will now certainly have higher hurdles to overcome, particularly in cases where there was no previous connection between the charity and the testator.

However, those considering contesting a will should not find too much hope in this ruling. The categories of people who are entitled to challenge a will vary slightly between the legislation in the UK and Hong Kong, with the Hong Kong legislation placing higher hurdles to overcome to make the challenge by adult children of the deceased. In the UK, any child of the deceased is entitled to contest a will, however in Hong Kong the legislation provides that an adult child of the deceased is only entitled to challenge a will in circumstances where immediately before the deceased’s passing the child was being either wholly or substantially maintained by the deceased. This distinction also applies to former spouses of the deceased. (Interestingly, the Hong Kong legislation also entitles female or male partners of the deceased by a union of concubinage to contest a will).

Where an adult child of the deceased with reasonable earning capacity has in the past challenged an estate, they have very seldom been successful. It is not likely that this case will change that. It is important to note that the claimant in this case had limited capacity to work and earn, and this had a significant impact on the outcome.

The decision has touched on an area of inheritance law not previously covered by the relevant legislation in either the UK or Hong Kong, although the current maintenance requirement in Hong Kong makes it even less likely that an adult child applicant making a claim on an estate in Hong Kong would succeed. It is a significant ruling particularly considering the 26 year estrangement of the deceased and her daughter. Although this ruling appears to have given the Court a distinctly wider scope to intervene against the testator’s wishes where an adult child contests the distribution of the estate, there are still a number of strict parameters restricting the courts, even under the less restrictive UK legislation, from applying this precedent too liberally.

Joanne Brown

The above is not intended to be relied on as legal advice and specific legal advice should be sought at all times in relation to the above.

If you would like to discuss any of the matters discussed in this brief article, please contact:

Joanne Brown
Partner | Email

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.