playing games with inheritance and the principle of testamentary freedom following ilott v blue cross

Testamentary freedom and the risks of relying on inheritance

Can adult children ‘rely’ on receiving an inheritance from their parents? Or is this a risky game to play, following what has been seen as a restatement of the principle of testamentary freedom in Ilott v Blue Cross & others?

Following the case of Ilott v Blue Cross & Others, a lot has been written about what the Supreme Court’s decision means for those making a will. The feeling is that the decision shifts the emphasis back to the principle of testamentary freedom – that people should be free to leave their property and money as they choose. We reported on the Ilott case when the decision was released. Now that the dust is settling, we take another look at what the case actually means for adult children who are disappointed by a parent’s will, and claims brought by them under the Inheritance (Provision for Families and Dependants) Act 1975 (the Inheritance Act).

Testamentary Freedom and the Inheritance Act

The principle of ‘testamentary freedom’ is a long-standing principle in English law. It lays down a presumption that a UK citizen is free to leave his or her money and property as he or she likes in a will. This should be looked at “…clearly and impartially, without allowing emotion or pity for children or dependants to cloud our view. Based on this principle alone, an individual would be unwise to rely on receiving an inheritance, and from making certain lifestyle decisions based on that. An example of such a decision would be choosing not to buy a property in anticipation of inheriting the family home on the death of a parent.

All is not lost, however, because the Inheritance Act contains a provision by which certain people, including a child of the deceased, can bring a claim for ‘reasonable financial provision’ or ‘maintenance’ against the estate. This does not prevent a Testator leaving his estate how he chooses – but it does mean that the courts may intervene and carry out a certain redistribution exercise pursuant to the Inheritance Act in some circumstances.

Adult children claiming under the Inheritance Act 1975

An adult child claiming under the Inheritance Act must show that the parent did not make reasonable financial provision for them in their will. The adult child must show that this failure to provide was unreasonable. If the failure to provide was unreasonable, the court will assess what reasonable financial provision ought to be made for the child ‘now’.

This is assessed against a number of factors set out in section 3(1) of the Inheritance Act 1975, as follows

(a) the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future;

(b) the financial resources and financial needs which any other applicant for an order under section 2 of this Act has or is likely to have in the foreseeable future;

(c) the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future;

(d) any obligations and responsibilities which the deceased had towards any applicant for an order under the said section 2 or towards any beneficiary of the estate of the deceased;

(e) the size and nature of the net estate of the deceased;

(f) any physical or mental disability of any applicant for an order under the said section 2 or any beneficiary of the estate of the deceased;

(g) any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant.

It’s important to remember that this assessment is fact specific too. However, the Supreme Court in the Ilott case made it clear that the redistribution exercise that the courts can carry out under the Inheritance Act should not be an exercising in either rewarding good behaviour or penalising bad behaviour on the part of either the child or the deceased. The court’s role is to establish what reasonable financial provision would be, given the adult child’s circumstances and the competing interest of other beneficiaries of the will – or other claimants under the Act.

A ‘moral’ claim

In addition to the objective question of whether the Testator acted reasonably, the Supreme Court confirmed the need for some ‘moral’ element to the claim – “…beyond the mere fact of a blood relationship, some reason why it can be said that, in the circumstances, it is unreasonable that no or no greater provision was in fact made” (Oliver J). The extent of what will amount to a ‘moral’ claim will no doubt develop over time.

More weight given to elderly or disabled children

If the adult child is elderly or disabled, this will carry more weight with the court; it is also possible that the courts will give more weight to a claimant relying on State benefits, although this view did come under some criticism by the Supreme Court. It will always be a balancing act – perhaps a claimant reliant on State benefits because he or she has significant caring responsibilities for their own child will be recognised over a claimant facing fewer barriers to work.

A shift in emphasis but no change in the law

It’s important to remember that the law hasn’t changed following Ilott – adult children still have a right to make a claim for reasonable financial provision under the Inheritance Act 1975, and each case will be scrutinised by the courts unless a settlement is reached through before reaching a full hearing. In the Ilott case, the original claimant, Heather Ilott, still received an award – her mother had not made reasonable provision for her in her will. However, the level of the award ended up being reduced. What does seem clear is that the principle of testamentary freedom is still very much alive, and an adult child should not assume that they will be able to succeed in a claim, should they be left out of a will.

If you have been left out of a parent’s will, or feel that you should have received more, our advice is to talk to a specialist will dispute solicitor who will assess your claim and advise you on the best way to proceed.