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Ilot v Mitson and the danger of Inheritance Act claims

Date:3 AUG 2015
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Rebecca Harling, Thomas Eggar LLP

The recent Family Division Court of Appeal case of Ilot v Mitson [2015] EWCA Civ 797 has caused a stir in the world of inheritance act claims. It deals with a claim by Heather Ilot over the estate of her deceased mother, Melita Jackson. The deceased left the majority of her net estate (£486,000) to three animal charities (RSPCA, RSPB and the Blue Cross) and made no provision for Mrs Ilot her only daughter. Mrs Ilot contested the will under the Inheritance (Provision for Family and Dependants) Act 1975. She was, by this time, a married mother of five, in dire financial straits and almost completely reliant on state benefits. She had been estranged from her mother for over 30 years after eloping with a boyfriend at age 17.

At first instance, the judge awarded Mrs Ilot £50,000, concluding that the deceased did not make reasonable financial provision for her daughter. Mrs Ilot appealed this decision, on the basis that the award was inadequate. The decision was subsequently overturned and a finding in favour of the three charities. Mrs Ilot then appealed again and the Court of Appeal ruled in her favour but remitted the case to determine the issue of quantum. The recent judgment confirms that Mrs Ilot has been awarded a third of her mother’s estate, some £164,000.

The 1975 Inheritance Act allows the courts discretion to redistribute the deceased’s estate where the will or intestacy rules fail to make 'reasonable financial provision' for the applicant. Such claims are open to surviving spouses, former spouses, co-habitees, children (including step children and children of the family), civil partners or anyone being maintained by the deceased.

My colleagues in the contentious trust and probate team have informed me that there are two schools of thought to draw from the outcome in Ilot v Mitson. One being that this case could be seen to open the floodgates for similar claims and potentially undermine testamentary freedom. The other being that this is a very fact-specific case where Mrs Illot had a great financial need and the other beneficiaries, all animal charities, were seen to have no human need, a sentiment followed through the case which spurred the court to use its wide discretion to provide for her as they are empowered to do under the Act. Mrs Ilot’s reasonable financial needs were met with a sum large enough for her to buy her council house which would not, in itself disrupt her benefits. She was also provided with an additional optional sum of £20,000 which she could request in part or in full to invest to provide her with an additional income, again which was not large enough to undermine her benefits. Had there been other (non-charity) beneficiaries, or had Mrs Ilot not been in such a financially precarious position, the award may have been very different.

What is the implication of this case in the world of family law? This draws me back to the question of reasonable financial provision. Just as Mrs Ilot was able to bring her claim (and win) on the basis of no reasonable financial provision having been made for her in her mother’s will, a spouse or former spouse could do like-wise, potentially to greater effect as I shall explain below. The definition of reasonable financial provision varies from claim to claim. It is worth noting that inheritance claims brought by surviving spouses and surviving former spouses and inheritance claims brought by other categories of claimant are treated differently. If such a claim is being brought by a spouse of the deceased then reasonable financial provision will mean such financial provision as would be reasonable for a husband or wife to receive, whether or not that provision is required for their maintenance.

For all other claimants and former spouses it means such financial provision as would be reasonable for their maintenance. If the parties are separated but not yet divorced and decree absolute has not been obtained, then the higher standard would apply. Additionally, if a party dies within 12 months of decree absolute and at the time of death the surviving party has not made an application for financial provision under the Matrimonial Causes Act or has made an application that has not yet been determined, the court has the discretion to treat the surviving party as if no decree had been made.

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When considering an Inheritance Act claim by a spouse or former spouse and whether the financial provision is reasonable, as well as the factors that apply to all claimants, the court will look at the factors set out at section 3 of the Inheritance Act:
  • age of the applicant;
  • duration of the marriage;
  • contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family.
These factors are reminiscent of the section 25 factors in the Matrimonial Causes Act 1973. In fact, the court will also consider the provision the applicant might reasonably have expected to receive if on the day the deceased died, the marriage, instead of being terminated by death, had been terminated by a decree of divorce, the 'divorce cross check'.

Such claims can be excluded on divorce and routinely, court orders resolving financial remedy proceedings include specific clauses excluding former spouses claims under the Inheritance Act. Nuptial agreements also routinely feature such exclusion clauses and, though not strictly binding, would certainly be a factor which the court would give weight to.

I believe, however, that there are many separated or divorced couples who have not had their financial agreements sealed into a binding court orders. Their claims are still open and many will not have given consideration to the risk of Inheritance Act claims upon their deaths (or indeed claims under the Matrimonial Causes Act during their life time). They may consider that they have moved on with their lives and drafted new wills or letters of wishes, only for their errant spouses to come back after their death, clamouring for reasonable financial provision, and staking a claim on their estate.

In an increasingly legally-savy age, where a growing number of parties are seeking to cash-in on potential windfalls, be it via re-opening their financial claims post separation or staking a claim on an inheritance, it is clear that expert legal advice is needed in order to provide adequate protection and avoid expensive litigation at a later stage.

Such cases highlight the fact that family practitioners must give appropriate weight to these issues when advising their clients as to the importance of dismissal of claims, both during their lifetime and against their estate upon death.

The views expressed by contributing authors are not necessarily those of Family Law or Jordan Publishing and should not be considered as legal advice.