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Ilott v. Mitson, really a sea change?

There has been a lot of media attention over the past day or so over the decision of the Court of Appeal in Ilott v. Mitson [2015] EWCA Civ 797. For example, the BBC website describes it as “a landmark Court of Appeal ruling which has dealt a major blow to the rights of people to choose who they want to leave money to when they die”. A Daily Telegraph headline states “Your will can be ignored say judges”.

This is somewhat surprising because, first, the jurisdiction under which the order was made has existed since 1975 (and in a more limited form since 1938). Second, this decision was merely about the amount of provision that Mrs Ilott was to be awarded. The Court of Appeal had previously decided that she was entitled to reasonable provision in its earlier decision in 2011 ([2011] EWCA Civ 346). This received little attention outside the legal world. It is that decision that ignored the provisions of the testator’s will.

Children are one of the limited class of persons who can apply under the Inheritance (Provision for Family and Dependants) Act 1975 for provision out of a deceased’s estate on the ground that it does not make reasonable financial provision for them. The others who can apply are spouses and former spouses, civil partners and former civil partners, people who were treated as a child of any family in which the deceased had a parental role, and people who were being maintained by the deceased immediately before their death.

Applications by infant children are relatively straightforward. Applications by adult children are more problematic. Under the previous legislation adult children could only apply in very limited circumstances. If they were over 21 they either had to be disabled or, in the case of a daughter, be unmarried. It was long thought, following the decision of the Court of Appeal in Re Coventry [1980] Ch. 461, that there was some extra threshold that an adult child had to cross, before provision would be made. Typically this would be by showing some special circumstance, such as disability, or some moral obligation owed by the deceased to the applicant.

In the 2011 decision in Ilott that view was held to be erroneous. The Court stressed that in all cases a value judgment had to be made taking into account all of the factors two which the Court is directed under Section 3 of the Act. Even that decision was more explanatory of the earlier authorities than revolutionary.

When looking at those factors in the factual context of Ilott one can readily see why provision was awarded. The estate was relatively large. The applicant was poor. The competing beneficiaries were charities which had no lifetime connection with the deceased
The fact that provision was awarded in Ilott to someone who had been expressly disinherited by the testator is also not a novel factor of that case. Provision was awarded in a case of deliberate disinheritance in Espinosa v. Bourke [1999] 3 FCR 76.

This week’s decision only went to the question of how much was to be awarded (despite the exhortations of the Court of Appeal to settle in 2011). The District Judge to whom the case had been remitted awarded £50,000. The Court of Appeal increased this to over £160,000 or about a third of the Estate. In doing so it had to take into account the Section 3 criteria, and only make an award for Mrs Ilott’s maintenance.

The underlying rationale for the award appears to be to secure Mrs Ilott’s house by allowing her to exercise the right to buy. This had a twofold purpose: to relieve her of some income needs in paying rent, and to provide an asset form which equity could be released at a later date to provide a pension. There was also concern to avoid an award which would merely have the effect of reducing Mrs Ilott’s benefits.

The decision does not have the impact on testamentary freedom that the press coverage suggests. The Courts have had the jurisdiction to interfere in favour of a limited class for many years. The decision is merely an illustration of the impact of that decision on an unusual set of facts. The most that can be said is that it may be difficult to wholly disinherit a child who is in straitened financial circumstances.

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