The Court of Appeal has made a landmark decision regarding the rights of disinherited children and the validity of their claims against a parent’s estate. The impact of the ruling will make it easier for children to lodge claims against; even in cases where they have been left out of the deceased will altogether. It is also believed the ruling could cause chaos for the charity sector.
The increased scope for financial claims means that the charity sector, which had previously relied on the protection of the courts through strict legislation, will now be vulnerable – as children will be able to contest the division of their parents’ monetary assets. Prior to the decision, children could only successfully pursue a claim for reasonable financial provision from a parent’s Estate if there was evidence of special circumstances or a moral obligation on the part of the parent.
Heather Illott brought a claim that reasonable financial provision should be made to her from her mother’s Estate, pursuant to the Inheritance (Provision for Family and Dependents) Act 1975. The validity of the claim lay in Illot’s argument that her mother had excluded her and other members of the family from receiving any of the estate, instead choosing to divide her assets between three animal charities of which she had no personal affiliation.
The Court of Appeal ruled that given Ms Illott’s socio economic background and minimal income, financial provision should be made from her mother’s inheritance. Heather Illot had been living independently of her mother and received basic state benefits. The Court ruled that reasonable financial provision should be made, although not to the extent where it would affect her eligibility to receive welfare income.
The case first went before the courts in 2007 where a District Judge awarded Illott a lump sum of £50,000. It was argued that this decision failed to give due care or consideration to the effect of this on her living circumstances (including her receipt of state benefits). As a result, Illott appealed the decision which was dismissed in 2014 before appearing before the Court of Appeal.
Following a comprehensive investigation into the particular circumstances of the case, the Court of Appeal decided that the initial decision should be set aside based on two fundamental errors. Firstly it was argued that the award should be limited as Illott was able to live within her means, although relying on state benefits. Secondly, the Court of Appeal questioned the logic of the award as a large capital payment would undermine Illott’s right to receive state benefits.
The Court of Appeal awarded Illott £143,000 to cover the cost of purchasing a suitable property with the addition of £20,000 to supplement her state benefits.
The ruling of the case is set to have a significant impact for those wishing to contest the will of a deceased where no reasonable financial provision has been made for them. For further information on making an Inheritance Act claim or to speak with a specialist member of our Private Client team by contacting us on 0845 050 1958. Alternatively please complete an online enquiry form.