In July the UK Court of Appeal awarded a £164,000 inheritance to a woman who had been expressly cut out of her mother’s will. The ruling could have a significant impact on people’s right to leave money to those they choose and confirms that trusts are a far more secure way to distribute wealth upon death.
Heather Ilott, now aged 54, was an only child born two months after her father died in an accident. In 1978, at the age of 17 she eloped with her boyfriend. They subsequently married and had five children but she and her mother, Melita Jackson, were never reconciled. When Jackson made her last will in 2002 she included a letter explaining why she had disinherited her only daughter and explicitly instructed the executors of her will to fight any claim Ilott might make after her death. Her £500,000 estate was left to animal charities when she died in 2004.
Ilott challenged the will in 2007 under a right to “reasonable provision” that is contained in the 1975 Inheritance Act. This is generally used for young children who are left out of wills, but in 2011, Ilott won £50,000 from the estate. She appealed for more and the Court of Appeal awarded £164,000 to allow her to buy her housing association home. It said Ilott’s mother had been “unreasonable, capricious and harsh”. The fact that Jackson had little connection to the charities to which she left her money played a part in the ruling, the judges said.
The Courts are placed in a difficult position when close family members with specific needs do not inherit, even though the deceased may have made it clear that this was their intention. This Court of Appeal ruling will have implications for how people should draw up their wills. By making it easier for adult “disinherited” children to challenge wills and claim greater sums by way of reasonable provision, testators will have to explain their reasons for why they are leaving money to certain parties and demonstrate tangible connections to them.
Given that the Inheritance Act 1975 allows a court to “override” the general principle of testamentary freedom in certain situations where it is considered “just and equitable”, a more secure way to control the distribution of wealth after death would be through a trust. Using trusts for succession planning provides a way for a person to be confident that the right people benefit, by the right amount, at the right time, because the Inheritance Act 1975 does not apply. Furthermore trusts, unlike wills, are confidential. Anyone with succession planning concerns should contact their most convenient Sovereign office for a complimentary consultation without obligation.