A decision by an appeals court to transfer a third of a deceased woman's estate to her estranged daughter should not greatly damage freedom of persons to leave estates to their chosen beneficiaries, lawyers say.

The decision by a UK court this week to award a third of a deceased mother’s estate to her estranged daughter is unlikely to greatly undermine the general freedom of people to bequeath money to whom they wish, but underscores that wills can be challenged and that advice should be heeded on the matter, lawyers say.

Heather Ilott, of Ware, Hertfordshire, has been told by the Court of Appeal in London that she could receive a portion of the $486,000 estate that her mother, Melita Jackson, left to animal charities when she died in 2004.

(The matter applies to the legal system of England and Wales; a different legal order operates in Scotland.)

A flurry of newspaper articles about the case suggested that people’s freedom to leave money to whomever they wanted could end and that the UK could see the arrival of the forced heirship system that operates in countries such as France. (In France, the system that derives from the Napoleonic Code forces parents to give fixed portions of an estate to their offspring, with limited opportunity for variation.)

Ilott, 54, had, media reports said, eloped at the age of 17 with her boyfriend. Her mother did not want to give her any of her estate. Instead, her wealth was left to charities such as the Royal Society for the Protection of Animals.

"Yesterday's Court of Appeal decision in Ilott v Mitson is likely to have important implications for people making wills, and those advising them,” Jennifer Ridgway, associate at law firm Michelmores, told this publication. 

“While it has long been the case that family and dependants may bring a claim against a deceased's estate, this decision suggests that claims by adult children, even those who were estranged from the deceased, may be successful if those children have financial need. It also suggests that those who wish to leave substantial sums to charity, particularly legacies which may be challenged at a later date by disinherited family members, should seek to show a link or connection to the charities they choose. It will be important for people making a will to seek specialist advice to ensure that suitable supporting documentation is drawn up to bolster the ability to defend any similar challenge," Ridgway said.

Trusts
The case also highlights the benefits of putting estates into a trust, according to Rachel Griffin, a financial planner at Old Mutual Wealth. 

“Having a valid will forms the foundation of any financial planning strategy. Being able to decide freely who can benefit from your hard earned estate is a privilege that is afforded under English law. However, this Court of Appeal ruling has the potential to concern all those who have made provision in their wills that favour a beneficiary over another,” Griffin said.

“This case highlights the benefits of making provision for handing down your estate during your lifetime through the use of trusts. Benefits of using a trust are confidentiality, the ability to choose beneficiaries and add and remove them in the future, tax efficiency and putting you in control of who benefits from your estate and when. Using a trust also allows a person to set out why particular choices are made within a ‘letter of wishes’ which, whilst not binding, will allow the trustees to take account of the settlor’s wishes,” she added.  

Ryan Mowat, partner and contentious trusts and probate expert at Kingsley Napley, said: “This case is unlikely to have the far-reaching impact that is being predicted. There is no need for people to panic fearing the wishes they have prescribed in their will may be overturned by the courts in the future.

“The courts have to consider a number of factors in deciding whether a provision, or lack of a provision, in a will is reasonable. In particular, the courts will be interested in the needs and resources of the parties. In the Illot v Mitson case, the defendants were charities whereas the claimant was plainly in financial need. The award was set at a reasonable level to enable her to buy a property and to have a small cash sum that would not affect her state benefits,” he continued.

“Claims by disinherited adult children who are not in financial need will still be very difficult. In contrast, surviving spouses will nearly always have good claims if they are excluded from a will or not left a reasonable provision. For the majority of cases going forward, a person’s last wishes will still stand provided they have made a valid will,” he said. 

Anniversary
The decision was made, lawyers said, as a key piece of legislation about wills marks its 40th anniversary. The legislation is the Provision For Family and Dependants Act of 1975.

“Those drafting wills and advising on estate planning will no doubt be aware of the potential for a challenge to the terms of the will (as opposed to a challenge to the validity of the will itself) under the Inheritance (Provision for Family and Dependants) Act 1975. This risk cannot be said to be new and this judgment is therefore not as ground-breaking as the press suggests; it concerns a specific point on appeal and does not introduce a wholesale change as has been suggested,” Stephen Richards, head of contentious trusts and succession group at Withers, the law firm, said.

“The case is fact specific and as Lord Justice Ryder noted in his judgment, if there is to be further debate on this issue of how 'maintenance' is to be construed, then it will be in a case where the circumstances permit a broader discussion. As the 1975 Act celebrates its ruby anniversary this year, it is clear that the Act remains a statute that generates interest,” Richards said.

Richard Kershaw, partner at Hunters Solicitors, said: "In Ilott v Mitson ([2015] EWCA Civ 797) the Court of Appeal has confirmed that a will which fails to make reasonable provision for an adult child can be challenged.

“Once the threshold test has been met, the question is one of quantification. The successful appellant (Ilott) was estranged from her late mother who made no provision for her in her will, instead leaving her estate to three animal charities. A challenge was brought under the Inheritance (Provision for Family and Dependants) Act 1975; initially Ms Ilott was awarded £50,000 in the Family Division, then appealed to the High Court and eventually to the Court of Appeal who have now awarded her £164,000, about one-third of the net estate. The case is unusual but not seismic,” he said.

“It is rare for an adult child who can work to succeed in a claim under the 1975 Act. Here the Court of Appeal appears to have been influenced by the fact that the mother had no connection with the charities during her lifetime and that they had no financial 'need' whereas Ms Ilott clearly did,” he added.