Is there an obligation to leave assets to anyone when I die?
Many European countries have a forced heirship regime. In contrast, UK citizens have something called ‘freedom of testamentary disposition’ - broadly speaking, you can leave your assets to whom you wish. However, this has, to some extent been limited by law.
Could my Will be challenged?
The Inheritance (Provision for Family and Dependents) Act 1975 (“I(PFD)A 1975”) provides that if reasonable financial provision hasn’t been made for certain categories of people under a Will, then a claim may be brought against the estate. A claim may not be brought simply because an individual believes it unfair, in their mind, that they did not receive any (or enough) of the estate.
Who can bring a claim?
Claimants can only be from a limited class of individuals. The I(PFD)A 1975 allows the following categories of individuals to bring a claim:
(a) The spouse or civil partner of the deceased
(b) The former spouse or former civil partner of the deceased, but not one who has formed a subsequent marriage or civil partnership
(c) A child of the deceased
(d) Any person (not being a child of the deceased) who has been treated by the deceased as a child of the family
(e) Any person who immediately before the death of the deceased was being maintained, either wholly or partly, by the deceased
(f) Any person who (for two years immediately prior to the death of the deceased) had been living in the same household as the deceased as their husband, wife or civil partner
What constitutes ‘reasonable financial provision’?
Claimants must show the disposition of the deceased’s estate affected by the Will, or the intestacy rules (or the combination of them), doesn’t make reasonable financial provision for them. Where claimants aren’t the surviving spouse or civil partner, the standard is such financial provision as it would be reasonable in all the circumstances for them to receive for their maintenance.
The concept of maintenance is judged objectively by the Court, however the reasonableness of the deceased in the context of the case as a whole will be a relevant factor. It should be noted, of course, that just because the deceased acted unreasonably in the provisions of their Will, it does not necessarily mean reasonable financial provision has not been made for a claimant. Conversely, the deceased may have acted fairly in all the circumstances, however it does not necessarily mean that reasonable financial provision has been made.
Ilott v The Blue Cross and Others 
The Supreme Court has recently been in the headlines for its judgement in the case of Ilott v The Blue Cross and Others.
The deceased had been estranged from her daughter, Mrs Ilott, since 1978, beginning when Mrs Ilott ran away from home at 17yrs to live with her boyfriend, of whom the deceased did not approve. The estrangement lasted 26 years, with three very brief, unsuccessful attempts of reconciliation that were documented by both parties.
In the first instance, it was noted by District Judge Millon that the deceased’s attitude towards her daughter was somewhat unreasonable. Apologies from Mrs llott had been refused by her mother and DJ Million concluded that little short of complete rejection by Mrs Ilott of her husband would have been deemed acceptable to the deceased. It is worth noting that Mr Ilott is the same boyfriend the deceased’s daughter left home to live with those years ago.
The deceased left her estate to three charities in her Will and made her daughter aware during her lifetime that she was not to expect a penny when she died. A letter of wishes instructing her Executors to defend any claim against the estate by her daughter was left alongside the Will.
Mrs Ilott brought a claim against the estate under the 1975 Act and in the first instance was awarded £50,000. On appeal, she was awarded £143,000 to buy the rented home she was living in and an additional £20,000 income by the Court of Appeal. The Supreme Court struck out this ruling, reinstating the original judgement.
The Supreme Court gave weight to many factors, but an important distinction was made that maintenance doesn’t extend to everything it would be desirable for the claimant to have; rather maintenance must make provision to meet the everyday expenses of living. A distinction must therefore be made between income and capital. Maintenance is not a form of capital provision.
It was noted by the Court that many domestic household items owned by Mrs Ilott and her family were in desperate need of repair, unable to be replaced as there was a lack of sufficient income into the household to do so. It was considered that these could be considered “necessities” for the day-to-day running of the family and that it was feasible that these could be considered within the concept of maintenance of the family.
The family were renting their home from a Housing Association and were reliant on benefits (some of which were means tested). As the family were in receipt of both housing benefit and council tax benefit, it therefore feels slightly brash of the Court of Appeal to have issued Mrs Ilott with the capital to buy the rented property, as this seems to depart from the principle of maintenance. More sense would have been made by providing Mrs Ilott with a life interest in the sum to avoid any the possibility of disqualifying her from means tested benefits claimed.
Can I do anything?
We would advise writing a Letter of Wishes to sit alongside your Will. Whilst not legally binding, this clearly indicates as evidence to the Court and others, your intentions when making the Will and the reasoning behind them.
Additionally, some individuals chose to make a “token” gift to individuals in their Will that will only be paid on the condition that a claim isn’t made against the estate. The onus therefore switches onto the prospective claimant as to whether they choose to accept the “token” sum, or whether they choose to refuse it and risk ending up with nothing if their claim under the I(PFD)A 1975 is unsuccessful.
The fact that claims by individuals who aren’t a spouse or civil partner are limited to being for maintenance is important, as it underlines the principle of testamentary freedom as being a standout principle of English Law. Those who are the chosen beneficiaries of a testator under a Will do not have to justify any need for maintenance from the deceased’s estate. As the Supreme Court quite rightly pointed out, any award made under the I(PFD)A 1975 will always be to the detriment of those who the deceased intended to benefit and therefore the onus should always be on the claimant to show that reasonable financial provision should have been made for them.
The intention of the I(PFD)A 1975 has never been to allow disgruntled financially independent adult children to challenge their parents’ testamentary freedom. Whilst in the above case, Mrs Ilott did receive a sum of money from her mother’s estate for her maintenance, it feels very much as though the Supreme Court has worked to bring this case back in line with the original intentions of the Act, reiterating that where an individual is of sound mind, they should be able to leave their assets to whomsoever they choose, provided reasonable maintenance has been made for any financial dependents.
Above all, of the utmost importance is ensuring that a Will is an accurate reflection of your wishes. Remember, there is no automatic presumption for anyone to inherit. If you are worried about the possibility of a claim being made against your estate and would like to review your Will, please give our Private Client department a call on 01603 625231 and a member of the team would be delighted to help.