Comfort for those making wills (and clarification on when they can be challenged)

Posted on April 28, 2017

The Supreme Court made an important decision* on wills and inheritance last month. The decision gives some comfort to those making wills that their wishes will be usually be respected after they die. The decision also clarifies the rules on when a will or (if there is no will) the intestacy rules can be challenged.

Background to the decision

Ms Heather Llott left home at 17 after being excluded by her mother. Some thirty years later, her mother died leaving around £500,000 to various charities. On benefits, with no pension and living in a rented flat with her husband and five children, Ms Llott challenged her mother’s will.

In making the challenge, Ms Llott relied on the Inheritance (Provision for Families and Dependents) Act 1975 (the Inheritance Act), which provides that a wife/husband, a child or one treated as a child can claim reasonable financial provision from the estate in certain circumstances.

The court agreed with Ms Llott in part, and on the facts, ordered £50,000 of the mother’s estate to be paid to her.

Both Ms Llott and the charities appealed: the former arguing that £50,000 was not enough; the charities arguing that it was too much – that the mother’s final wishes should be respected.

The Court of Appeal agreed that Ms Llott was entitled to but had not been given a reasonable provision in the will. The court increased her award to £143,000.

The Supreme Court (i.e. the latest) decision

The charity appealed and this time, the Supreme Court found against Ms Llott. In upholding the first court’s decision, the Supreme Court found that the first judge was correct and had not make any errors of principle in awarding £50,000.

The first paragraph of the Supreme Court’s judgment sets the tone succinctly:

“Unlike some other systems, English law recognises the freedom of individuals to dispose of their assets by will after death in whatever manner they wish. There are default succession rules in the event of intestacy, but by definition those only come into play if the deceased left no will. Otherwise the law knows of no rule of automatic succession or forced heirship.”

The judgment goes on to explain the only exception to a party’s freedom to dispose of his/her assets as they like, namely, that the court has power in defined circumstances to modify either the will or the intestacy rules if satisfied that they do not make reasonable financial provision for a limited class of persons.

In each case, it is for the judge to assess the circumstances and to decide the extent to which a claimant has a right to receive some of the inheritance – and how much. The first judge had done this – and his decision was upheld.

Why the judgment matters

After the Court of Appeal gave its decision (awarding just under a third of the total inheritance), some were concerned that the judgment would encourage adult children, unhappy with the allocation made, to dispute their parents’ wills – thereby undermining a person’s freedom to make provision when writing wills. The Supreme Court decision alleviates this concern – supporting as it does a person’s freedom to make a will.

The Supreme Court’s judgment also reassures charities, who earn much of their income from charitable bequests made through wills, that they will not have to deal with multiple challenges from adults ignored by their parents in their will.

A review ahead?

Lady Hale, one of the Supreme Court judges, considered the current state of inheritance laws to be unsatisfactory. In particular, she pointed to the fact that the Inheritance Act gives no guidance on what factors should be taken into account when deciding whether an adult child deserves - or does not deserve - reasonable maintenance provision from the inheritance. A review of the Inheritance Act might well lie ahead.

* See Ilott (Respondent) -v- The Blue Cross and others (Appellants) [2017] UKSC 17 and the Supreme Court's Press release

Contact

Christopher Burke deals with a wide range of Inheritance Act disputes. If you have any questions about a loved one's will or how you stand if there is no will, you can contact him on 0161 684 6941 or make an enquiry.

Posted 28 April 2017

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

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