Thu, 06 Aug 2015
In the recent case of Ilott v Mitson [2015] EWCA Civ 797, an adult daughter whose estranged mother left her nothing from her £486,000 estate, instead choosing to leave her estate to charity, has recovered £143,000 with an option for a further £20,000.
Mrs Ilott was the late Mrs Jackson’s only child. Mrs Ilott lived in a housing association home, but had an option to buy it for £143,000. She and her husband were dependent on benefits for income.
When her mother died she brought a claim under the Inheritance (Provision for Family and Dependants) Act 1975 for maintenance.
Mrs Ilott had already won one appeal in this case. In Ilott v Mitson [2012] 2 FLR 170 the Court of Appeal ruled that adult children do not have to prove some special circumstances or some moral obligation on the Deceased to provide for them in order to bring a successful claim. They need only show that the estate fails to make reasonable financial provision for them. This appeal was about the amount of the award.
She had been awarded at trial a lump sum of £50,000. Was this reasonable? The Court of Appeal said not.
The Court had first to consider what the Act meant by maintenance. The Court of Appeal chose (again) to avoid defining it but suggest it mean things that were in the nature of day-to-day recurring expenses. It pointed out however the award of maintenance could be a lump sum to enable for example the purchase of a house to reduce expenses on rent or mortgage payments, or to pay a debt to reduce outgoings.
The Court then considered the surrounding circumstances of the case and the factors it had to consider under s.3 of the Act. The judgment is worth reading but the following key things stand out.
On the issue of estrangement the Court made it clear it was a factual question but pointed out that it is difficult to quantify responsibility for estrangement. In this case there was no basis to say the estrangement should reduce the award.
The Court considered the issues of Mrs Jackson’s testamentary wishes. The Court pointed out that the Act allowed the courts to make an award to ensure that an adult child received adequate maintenance only and that this struck the right balance between the two – at least where there is no-one else with a demonstrated need or expectation.
The Court noted that the charities would not be prejudiced by a higher award as they had no specific needs. It asked if her current living standard was sufficient. It was not when one took into account future needs for care and the like. This outweighed the fact she had been living independently for many years.
It considered the impact of any award on her social security benefit. The lower courts had not checked the impact of the award on benefits and tax credits, and so it undermined the logic of their award. Also it noted that the fact someone receives benefits does not mean they are not entitled to further maintenance under the Act.
The Court decided on the award of £143,000 because it would allow her to buy her home and at the same time allow her to preserve her entitlement to tax credits (which did not consider capital for means-testing) on which she relied. Anything less would achieve nothing.
Many are reporting this as ground-breaking. It is important, but not ground-breaking. It was simply the application of long standing principles. It is like most cases, unique to its facts. but illustrates that if the Claimant is on benefits (and I would suggest the same is true of any person who inherits under the will and who wishes his or her needs to be taken into account and who would be affected by any award to the Claimant), it is essential to understand how any award would impact on those benefits before one can decide what amounts to reasonable provision.
Aricle written by Richard Adkinson.
