A landmark ruling by the Court of Appeal in Ilott v Mitson has made its way to the Supreme Court. This case illustrates a balancing act between the testamentary wishes made under a will and the statutory rights and financial needs of an applicant.

Mrs Ilott made an application under the Inheritance (Provision for Family and Dependents) Act 1975 for reasonable financial provision from her late mother’s estate which in particular would allow her to purchase her council house.

A key two-fold test for the court to consider under the Act is whether the will made reasonable financial provision for the applicant, and if not, what the reasonable financial provision would be in the circumstances. Under the guidelines provided by the Act, the court would give regard to the financial needs and resources of the applicant, the financial resources and needs of other family members or beneficiaries under the will, the size and nature of the deceased’s estate, any other responsibilities owed by the deceased to the applicant and any other matter which the court deems relevant.

Mrs Jackson died in 2014 and by her will left the majority of her estate valued at £486,000 to charities. No provision had been left for her only child, Mrs Ilott, and a detailed letter explaining this decision was left with the will.

The mother and daughter became estranged many years ago when Mrs Ilott left home at a young age. Several attempts were made for reconciliation but failed. Mrs Ilott lives with her husband and five children, all of whom are adults and are financially reliant upon state benefits.

It was undisputed that no financial provision had been provided under the will. When deciding what the reasonable financial provision would be, the court took into consideration Mrs Ilott’s financial status not just at the time of the hearing, but also in the foreseeable future. It was said that the charities could not have had any competing financial need and, in doing so, the judge found Mrs Jackson’s conduct to be “harsh and unreasonable”. An award of £50,000 was made to Mrs Ilott with the remainder of the estate passing to the charities.

Mrs Ilott appealed stating that the effect of this large lump-sum award would deprive her of her means-tested state benefits and in any event would not be sufficient to purchase her council house. After three failed appeals, the court took into account Mrs Ilott’s extreme lack of financial provision and finally awarded £143,000 to purchase her council house plus the reasonable professional expenses for doing so, in addition to a lump-sum of up to £20,000 structured in a way that would allow Mrs Ilott to preserve her state benefits.

It was deemed irrelevant that the parties were estranged and it was rejected that Mrs Ilott should not have had any expectation to receive a gift from her mother’s estate. Instead, the decision illustrated that adult children have the same rights as younger dependents. Whilst Mrs Jackson had a lack of responsibility for her daughter, she had even less responsibility for the beneficiary charities. A full consideration of the individual circumstances were to be taken into account, and in doing so, an awareness of Mrs Ilott’s extreme lack of financial provision led the judge to make this award.

An appeal led by the charities is being heard by the Supreme Court where the following matters are to be decided:

  1. Whether the Court of Appeal was wrong to set aside the award made at first instance;
  2. Whether, in deciding to re-exercise the court’s discretion to make an award under the Act, the Court of Appeal erred in taking account of the factual position as at the date of the appeal rather than at the date of the original hearing;
  3. Whether the Court of Appeal was mistaken in its approach in assessing the ‘maintenance’ standard under the Act;
  4. Whether the Court of Appeal was wrong to structure an award under the Act in a way which allowed Mrs Ilott to preserve her entitlement to state benefits; and
  5. Whether the Court of Appeal erred in its application of the balancing exercise required under the Act.

The final judgement is not expected until later this year.