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How free are you when choosing beneficiaries for your Will?

View profile for Kirsten Edberg
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In an unprecedented decision the Court of Appeal has awarded a daughter, who was deliberately cut out of her mother’s Will, £163,000 from her late mother’s estate.  Kirsten Edberg, Private Client Lawyer, here reviews the surprising outcome in the case, and explains what this may mean for the future when it comes to who we do, or do not, choose as beneficiaries in our Will.

The deceased, Mrs Jackson, was estranged from her daughter, Mrs Ilott, for some 26 years.  When she was 17 years old, Mrs Ilott left home without her mother’s knowledge or agreement to live with a man whom she later married and had a family.  Mrs Ilott, now aged 54 years old, was living in straitened circumstances and reliant on state benefits.

Due to their broken relationship, Mrs Jackson decided to make no provision for her daughter or her family in her Will and wrote a clear letter explaining why her daughter should not benefit from her estate: ‘I can see no reason why my daughter should benefit in any way from my estate. I have made it clear to my daughter’.  Instead of having her daughter as a beneficiary, Mrs Jackson left her whole estate, worth approximately £500,000, to charity.

After her mother’s death and having not inherited anything, Mrs Ilott disputed the Will and brought a claim against the estate under the Inheritance (Provision for Family and Dependants) Act 1975.  “This Act was originally intended to help protect the immediate family and dependants of someone who has died; where adequate provision had not been made in their Will or under the intestacy rules”, explains Kirsten.  “Under the provisions of the Act, the Court takes into account a number of factors and has discretion to redistribute the estate to produce a fair result.”

District Judge Million made an award to Mrs Ilott limited to £50,000 in the first instance.  Mrs Ilott appealed seeking greater provision and when the High Court dismissed this appeal, Mrs Ilott appealed yet again.

The Court of Appeal found this was a case where reasonable financial provision should be made for Mrs Ilott’s living and increased the award to Mrs Ilott due to her ‘basic human need’ and that it was ‘unreasonable’ for Mrs Jackson to leave her daughter with nothing.  They found the right course was to make an award of £143,000, which was the cost to Mrs Ilott of purchasing the property in which she lived.  In addition, the Court awarded up to £20,000 in cash to provide a small immediate amount of additional income.

In reaching the decision, the Court of Appeal concluded that this provision of housing would enable Mrs Illot to receive a capital sum and to keep her tax credits.  The claim of Mrs Ilott had to be balanced against that of the charities but, since they did not rely on any competing need, they were not prejudiced by a higher award to Mrs Ilott.

“This case raises the question; do we still have freedom to choose who we want to leave our estates to?” considers Kirsten.  “Whilst the level of the award in this case may be surprising, the principles behind the decision have not changed.  Where provision is not being made in a Will for a child (or another potential claimant under the Act), then there is no way to prevent a claim being brought against the estate for financial provision.

Kirsten concludes, “We recommend that a clear and detailed explanation should be prepared to be read alongside the Will,  setting out the reasons why financial provision has not been made for the particular dependent or relative.  In addition, where an estate is left to charity, we would also advise that the reasons for choosing the particular charities are clearly recorded; showing sufficient evidence of the testator’s connection to the charity.”

If you’re considering writing your Will and have questions about where to start, or you wish to challenge a Will of a loved one, you can contact Kirsten or the Private Client team on 01329 222075 or visit their section of the website here.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.