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The Supreme Court has handed down judgment in the case of Ilott –v- The Blue Cross and Others, the first case under the Inheritance (Provision for Family and Dependents) Act 1975 to reach the Supreme Court.
The leading judgment is given by Lord Hughes and the case deals with the claim of an adult child pursuing an inheritance claim where the deceased has failed to make any testamentary provision for them.
The appeal arises out of a claim for reasonable financial provision brought by the daughter, Mrs Ilott, against the estate of her mother, Mrs Jackson. They had been estranged for approximately 26 years before Mrs Jackson’s death in 2004. Mrs Ilott left home at 17 and lived with her husband and five children in receipt of benefits. In her last will of 2002, Mrs Jackson left the majority of her estate to various charities and made no provision for her daughter. This decision had been reflected in earlier Wills by Mrs Jackson and Mrs Ilott had no expectation of benefitting from the estate.
At first instance, the Judge awarded Mrs Ilott £50,000. The charities challenged the award as did Mrs Ilott arguing the sum was too low and it deprived her of her means tested benefits. On appeal, Mrs Ilott was awarded £143,000 to buy the house she lived in and an option to receive a further £20,000 in two instalments. The Charities appealed.
The Supreme Court has held that the District Judge did not make the errors on which the Court of Appeal relied to alter his award. Referring to the 1975 Act the court must consider all factors within section 3 of the Act so far as they are relevant. For an applicant other than a spouse or partner, reasonable financial provision is limited to what it would be reasonable for maintenance only and does not represent any or everything which is desirable, nor is it limited to subsistence level.
The Supreme court was satisfied the District Judge had worked through each of the relevant s.3 factors and was entitled to take into account the estranged relationship between Mrs Ilott and her deceased mother in reaching his conclusion.
As to the concerns of the payment affecting benefits the court commented that part of the award could be spent on replacing old and worn out household equipment which the family had previously been unable to afford and would prevent capital exceeding the benefits cap. The Supreme Court was of the view the Court of Appeal’s order gave little weight to Mrs Jackson’s testamentary wishes and the long period of estrangement.
Lady Hale in her judgment goes on to recognise the freedom of testamentary disposition which continues to enjoy strong public support. Conversely however in circumstances of genuine need, previous financial contributions or disability the opposite is true. As a result, the 1975 Act will continue to show a presence in determining, when assessing each case on its own facts, whether there is a good reason or need to interfere and what makes an adult child deserving or undeserving giving the limited guidance that still remains.