The Last Will and Testament of ... But Not Necessarily the Last Word

Lawyers are forever chivvying their clients about making Wills and, as a general principle, making a Will is clearly a good idea. To a large extent, it allows you to control who is to benefit from your estate. If you are living with someone but you are neither married nor in a civil partnership, you can provide for your partner. Such a person has no entitlement under the intestacy rules - the rules that apply when an individual dies without having made a Will. If you have children of a previous marriage or relationship, making a Will can be an effective way of ensuring your current spouse or partner and children all benefit fairly from your estate.

The basic legal position is clear. Individuals are entitled to make a Will disposing of their estate in whatever terms they wish. However, an individual who thinks that a Will fails to make reasonable financial provision for them may apply to the court under the Inheritance (Provision for Family and Dependants) Act 1975. An application may be made by, amongst others, the deceased's spouse or a child of the deceased. In the case of an application by a spouse, the court has a wide power to determine what would have been "reasonable financial provision" for the Will to have made for the spouse. In the case of an application by a child, the court's power is limited to determining what it would be reasonable for the applicant to have received for his maintenance.

Two recent cases provide good illustrations of the way in which the 1975 Act works. In Iqbal v. Ahmed, the deceased died leaving a relatively small estate. He was survived by his wife, Mrs Iqbal, to whom he had been married for twenty two years, and Mr Ahmed, his son by a previous marriage. Under the Will, Mrs Iqbal was given a right to occupy the modest family home for life, subject to her bearing the costs of repairs, insurance and other outgoings. Subject to Mrs Iqbal's right to occupy, the deceased left his entire residuary estate to Mr Ahmed. The property was in a bad state of repair and needed some £30,000 spending on it, which Mrs Iqbal did not have. The trial judge ruled that the Will did not make reasonable financial provision for Mrs Iqbal. He ordered that (1) Mrs Iqbal should retain her right to occupy the property for life; (2) however, if Mrs Iqbal agreed to a sale of the property she would be entitled to half the proceeds of sale; (3) the residuary estate should go to Mrs Iqbal; and (4) Mr Ahmed was to bear half the costs of insurance and the structural repairs to the property. One of the main motivations behind the Judge's order was to provide Mrs Iqbal with some capital should she want or need to move house. The Court of Appeal upheld his order on appeal.

In Ilott v. Mitson, Mrs Jackson, the deceased, died leaving a net estate of £486,000. Apart from a number of monetary gifts, she left it all to three charities. Mrs Jackson was survived by one daughter, from whom she had been estranged for many years. She left a detailed Letter of Wishes setting out her reasons for disinheriting Mrs Ilott. The latter brought a claim under the 1975 Act. In the County Court, the trial judge ruled that the Will did not make reasonable financial provision for Mrs Ilott and awarded her £50,000 out of the estate. Both Mrs Ilott and the charities appealed to the High Court - Mrs Ilott on the basis that she should have been awarded more, the charities on the basis that she should not have been awarded anything. The High Court upheld the charities' appeal, ruling that the trial judge had got the law wrong. It was unnecessary for the High Court to deal with Mrs Ilott's appeal as to the amount of the award. Mrs Ilott appealed further to the Court of Appeal. The Court allowed her appeal and reinstated the order of the trial judge. The charities tried but failed to get permission to appeal to the Supreme Court. The current position is that Mrs Ilott's first appeal, as to the amount of the award, remains outstanding and will be dealt with by the High Court in due course.

The decision in the Ilott case has caused quite a few raised eyebrows. It is quite difficult to discern much in terms of underlying principle or guidance from the Court of Appeal's decision, or to understand precisely why the decision in Mrs Ilott's favour was finally upheld beyond the fact that she had five children and was living on benefits. The decision does seem to be distinctly more favourable to claims by adult children under the 1975 Act than the approach taken in previous cases, and it seems likely that in the future we will see more claims being made by adult children.

Family relationships can be complicated. Sometimes there can be a wholly understandable desire to bury one's head in the sand rather than confront difficult issues. However, the provisions of the 1975 Act need to be borne in mind when an individual is considering the terms of his or her Will. In some cases, there may be an argument for making a moderately-sized gift to an individual in an attempt to head off a possible claim under the 1975 Act.

If you need experienced and sensitive advice about such issues, please contact Esther Marchant.

Filed: 07/09/2011 14:26:39