The factors which the court takes in to account when deciding inheritance disputes and whether reasonable financial provision has been made are contained within section 3 of the Inheritance (Provision for Family and Dependents) Act 1975 and are as follows:
- the financial resources and needs (now and in the future) of the applicant;
- the financial resources and needs (now and in the future) of other applicants;
- the financial resources and needs (now and in the future) of the beneficiaries of the estate;
- the obligations and responsibilities of the deceased towards any applicant or beneficiary of the estate;
- the size and nature of the net estate of the deceased;
- the physical and mental disabilities of the applicant or any beneficiary of the estate; and
- any other matter which the court might consider relevant, including the conduct of any parties.
In light of the established thinking in inheritance disputes, a recent decision of the Court of Appeal is perhaps surprising.
Examples of inheritance disputes: Ilott v Mitson and others 
Melita Jackson died on 10 July 2004 at the age of 70, leaving an estate in the region of £486,000. Aside from a small number of specific legacies, she left the entirety of her estate to the Blue Cross Animal Welfare Society, the Royal Society for the Protection of Birds and the Royal Society for the Prevention of Cruelty to Animals (“the Charities”). Mrs Jackson’s will made no provision for her only daughter Heather Ilott, who had been estranged from her mother for over 20 years. Mrs Ilott was married with 5 children, living in modest circumstances and most of her family income was derived from welfare benefits and tax credits.
Mrs Ilott launched a claim against her mother’s estate relying on the Inheritance (Provision for Family and Dependents) Act 1975. The basis of the claim was that her mother’s will did not make reasonable financial provision for her.
After a two day hearing the District Judge found that Mrs Jackson’s will did not make reasonable financial provision for her daughter and Mrs Ilott was awarded a lump sum of £50,000, on the basis that this sum was reasonable (taking into account all of the circumstances) for Mrs Ilott’s maintenance.
This decision is not consistent with a person being “at liberty” to dispose of their property “in whatever way he or she pleases”. In spite of this surprising decision in favour of Mrs Ilott, she brought an appeal on the basis that the sum awarded to her was insufficient for her maintenance. The charities at this stage made their own application on the basis that the District Judge had interpreted the law incorrectly in making any provision at all for Mrs Ilott. They argued that if the correct legal test had been applied the conclusion would have been that the failure to make any provision for Mrs Ilott was reasonable.
The Judge considering the appeal found that the earlier Judge had made a mistake and that the correct decision ought to have been in accordance with the previous approach taken by the courts. This would have produced a finding that it was not unreasonable for Mrs Jackson to make no provision for her only child.
Mrs Ilott was not prepared to accept this finding and she made a further application to the Court of Appeal.
The Court of Appeal
It was established that the correct question to be addressed was not whether the deceased had acted unreasonably, but whether (on an objective basis) having considered all of the relevant factors, the resulting provision, or lack of it, was unreasonable. It was found that the original judge had asked the correct question meaning that the next step was to exercise a discretion as to what (if any) provision was to be made.
Another interesting aspect of this case is that generally the court will be reluctant to exercise its discretion where that means that a charitable donation is to be depleted. The argument advanced by the charities was that whilst Mrs Ilott was of limited financial resources, her mother remained entitled when she died to dispose of her property in whatever way she pleased. If she chose to disinherit her daughter then that was a decision for her. It was pointed out to the court that Mrs Ilott was a 46 years old woman, suffering from neither physical nor mental incapacity of any kind, who had made her life entirely independently of her mother for the 26 years prior to her mother’s death. It was pointed out that Mrs Ilott had chosen not to invite her own mother to her wedding and that Mrs Ilott and her husband had managed their lives over many years without any expectancy that any provision would be made to them. It was argued that on a proper analysis there was nothing in the facts to make it unreasonable that Mrs Ilott received no provision for her maintenance from her mother’s estate.
The charities also argued that a daughter could not complain about lack of financial provision “if she decides against her mother’s will, to throw in her lot with a man rather than remain with her mother”. The original judge found (and it was upheld by the Court of Appeal) that “a daughter is entitled (indeed would be expected) to make a life with a partner of her choice and have a family of her own. A daughter would reasonably hope that a parent would accept such a choice, and not blame her for it”. It was additionally found that it was reasonable for Mrs Ilott to have made a decision to remain at home. Even if Mrs Ilott were able to obtain paid work outside the home, she would be likely to remain in some financial need and only able to support herself to “some limited extent”. It was accepted that any earnings capacity that she had was limited.
The case of Ilott v Mitson highlights that when an Inheritance Dispute claim involves an adult beneficiary, the first test to be applied will be a “value judgment” or “qualitative decision“ as to whether or not reasonable financial provision has been made to the applicant. The correct question is not whether the deceased has acted unreasonably, but whether (on an objective basis) having considered all of the factors within Section 3 of the Act (as set out above) the resulting provision (or lack of it) was unreasonable. This is an important distinction and it will not be sufficient to simply argue that a parent has a moral obligation to a child.
There are strict time limits for bringing an Inheritance Dispute pursuant to the Inheritance (Provision for Family and Dependents) Act 1975 and if you consider that you may be eligible to make such a claim, it is important that you seek legal advice from an expert in contesting wills without delay.