Can your clients leave their adult children out of their Wills?
Adult children have the ability to claim against their parent’s estate if the parent’s Will does not make reasonable financial provision for them but how likely is such a claim to be successful?
Limits on freedom in Wills
Under the Inheritance (Provision for Family and Dependants) Act 1975 (“the Act”), certain specified categories of individuals, including the testator’s children, have the right to claim against an estate which does not make reasonable financial provision for them. Freedom of testamentary disposition has therefore been restricted by the Act (and by preceding legislation) for many decades.
For some years after the Act came into force, an adult child had to show special circumstances to succeed in a claim such as, for example, an ongoing disability; but in a number of cases since 1993 adult children with no such special circumstances have claimed successfully against a parent’s estate.
In deciding whether a Will has made reasonable financial provision for an applicant the court has to take into account a number of factors laid down by the Act. These are wide ranging and include any matter which the court may consider relevant. Claims have to be resolved on a case by case basis and there is very little guidance available in the Act or elsewhere.
The extent of a successful claim
The leading case concerning claims by adult children under the Act is a Supreme Court case where the claimant, Heather Ilott, had been left out of her mother’s Will after a long estrangement. Mrs Ilott’s claim succeeded and she was originally awarded £50,000 by the High Court. This was increased to £163,000 by the Court of Appeal and reduced to £50,000 again by the Supreme Court after the charitable residuary beneficiaries appealed..
Under the Act a successful claimant is entitled to “reasonable financial provision” from the estate claimed against. The Supreme Court emphasised in its judgment that reasonable financial provision means such provision as it would be reasonable for the applicant to receive for their maintenance.
The court commented that the limitation to maintenance is deliberate and demonstrates the importance attached by English law to a person’s freedom to make their Will in the way that they choose. As explained by Lady Hale in her judgment, social research shows that amongst the general population there is “strong emotional support for testamentary freedom, linked to ideas of individualism and human rights” but that circumstances could be envisaged when it should be possible to challenge a Will.
Maintenance is flexible
According to the Supreme Court, maintenance is “provision to meet the everyday expenses of living”; it is flexible and should be assessed on the facts of each case. It is not limited to subsistence. Lady Hale made the point that it might be thought that children ought to inherit a parent’s large estate consisting mainly of inherited property, even if they were not in need, but this is counter to the restriction to reasonable maintenance. Lady Hale questioned how the courts are meant to distinguish between a deserving and an undeserving applicant. The court, however, found that it was right for them to take into account the closeness of the relationship between the parent and child in assessing the extent of provision. Heather Illott’s long estrangement from her mother was therefore a pertinent factor in restricting the award to her.
In the view of the Supreme Court judges, the Court of Appeal had had no grounds to overturn the judgment of the lower court, which had given Heather Illott £50,000 from a £486,000 estate, and this award was reinstated.
Leaving adult children out of Wills
Unlike in many European countries, your clients have complete freedom when making their Will to include and exclude whoever they wish. If they do not want their adult children to benefit, then the Act gives that child the opportunity to bring a claim against the estate in the same way as Mrs Ilott.
If it reaches the courts, the merits of that claim will be decided on its own particular facts, but the quality of the parent/child relationship will be taken into account. Mrs Ilott, her husband and her five children lived on an income of just over £20,000 a year, and were in need of many basic necessities such as furniture and white goods; nevertheless, after years of litigation, the award in Mrs Ilott’s favour was limited to just over 10% of the estate.
Many testators who are contemplating leaving an adult child out of their Will will be doing so because the relationship has broken down. If that child has no need of financial help to meet “the everyday expenses of living” then following the Supreme Court’s comments, the claim is less likely to be successful. In any event, your clients should be encouraged to record (in a side letter to their Will) the state of the relationship and exactly why a decision was made to exclude an adult child.
If the relationship is a good one, but other reasons are behind the decision (perhaps one child is wealthy and another in poor health and in need of as much financial help as possible), then clients should be encouraged to explain their reasoning to their child beforehand to prevent a surprise after their death, adding to the distress of bereavement and perhaps igniting a potential claim.
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