ILOTT v MITSON: The outcome for charities
Ilott v Mitson [2017] UKSC 17 has been described as upholding the supremacy of testamentary freedom, and as being a win for charities. What does this mean and is it true?
The facts of Ilott v Mitson have been described here and are briefly as follows:
Ms Ilott was the daughter of Melita Jackson. Her father died before she was born. Aged 17, Ms Ilott moved out of home to live with a boyfriend Mrs Jackson did not like, and that led to a lifetime estrangement. Ms Ilott went on to marry her boyfriend and they had 5 children. Three attempts were made at reconciliation between mother and daughter, but none were successful. Mrs Jackson did not support her daughter financially, and her daughter did not expect to inherit anything from her estate. On her death, Mrs Jackson left everything to three animal charities which she had not previously had any connection with.
Ms Ilott and her family were not well off, and relied on state benefits for approximately 75% of their income. Ms Ilott made a claim under the Inheritance (Provision for Family and Dependants) Act 1975 for reasonable financial provision from the estate of her late mother. She was initially awarded £50,000, but (after a series of appeals) this was increased by the Court of Appeal to £143,000 (for her to buy her Housing Association house) and £20,000 for other financial needs. The charities appealed to the Supreme Court to have this decision overturned.
The Supreme Court found that, on the facts, there were three orders which could have been made:
- The original order of £50,000 ;
- The Court of Appeal order of £143,000 plus £20,000 cash;
- Dismissal of the claim, so that Ms Ilott received nothing.
The Judges felt that any of those orders could be justified (although it should be noted that by the time the matter came before the Supreme Court, option 3 was not available to them). They plumped for option 1 – overturning the decision of the Court of Appeal which had given a far higher award.
The reason that this is significant is because Mrs Jackson had chosen to leave her money to charities which she had not had a close association. Charities in these circumstances are used to facing the argument that this is essentially a windfall, and that the family of the testator deserves greater consideration. However, the Supreme Court emphasised that leaving money to charity is something which any testator is free to do. Whilst charities cannot have an expectation of a bequest, they do rely on legacy income for their work and this should not be readily dismissed. It can be easy to forget that the making an award to a Claimant under the Inheritance Act automatically reduces the amounts payable to the testators chosen beneficiaries, whether these are family, friends or charities. This decision is likely to make it easier for charities to defend bequests left to them from Claimants, particularly where the Claimant has no strong moral claim.
When making an award under the Inheritance Act, the Court has to consider whether the will makes ‘reasonable financial provision’ for the applicant, and not whether the testator acted reasonably. In this case, the testator does not appear to have acted reasonably – but that does not mean that reasonable financial provision was not made. Ms Ilott was not financially dependent on her mother – she had lived independently for decades, and had not expected to inherit anything.
This judgment has re-emphasised the importance of testamentary freedom. In England and Wales (unlike many other jurisdictions) there is no form of forced heirship – people can leave their estate entirely as they wish even if that means disinheriting their family entirely for totally unfair reasons. Whilst the Inheritance Act provides a means for a small number of people to make claims against the estate, Ilott has reiterated that the circumstances in which they can do this are very limited and the testators wishes should be given serious consideration in any such case.
No comments