Why is it important to make a Statement of Wishes to accompany your Will?
On 27th July 2015 the Court of Appeal gave judgment in the case of Ilott v Mitson EWCA Civ 797. The case has received wide media coverage and has raised doubts about the established principle of testamentary freedom.
The case concerned Melita Jackson ("Mrs Jackson") and Heather Ilott ("Mrs Ilott"). Mrs Ilott was Mrs Jackson's only daughter and in November 1978, Mrs Ilott (aged 17) left home to live with her now husband, Nicholas Ilott. From this point she and her mother were estranged, remaining so despite three unsuccessful attempts at reconciliation.
Mrs Jackson died in 2004 and left a Will leaving a legacy of £5,000 for the BBC Benevolent Fund. The residuary estate was to be divided between the animal charities The Blue Cross, The Royal Society for the Protection of Birds and the Royal Society for the Prevention of Cruelty to Animals. Mrs Jackson's net estate was valued at approximately £486,000.
Mrs Ilott brought a claim against her mother's estate pursuant to The Inheritance (Provision for Family and Dependants) Act 1975. This is a claim where the applicant (who must fall under a certain class, e.g. spouse, or child) claims that they did not receive reasonable financial provision from the deceased's will or intestacy. In "Inheritance Act" claims where the applicant is not a spouse/civil partner of the deceased, the test for reasonable financial provision is: "such financial provision as it would be reasonable in all circumstances of the case for the applicant to receive for his maintenance."
When determining whether the deceased has made reasonable financial provision the Court must have regard to a variety of factors. Among the factors considered were the financial resources and needs of Mrs Ilott, the financial resources and needs of the charities and the obligations and responsibilities which the deceased had towards her daughter.
Mrs Ilott and her husband had five children and lived in a housing association property which they had a right to buy at the price of £143,000. They had limited income and relied heavily on state benefits. The Court described her financial circumstances as "obviously straitened and needy". The charities did not assert any financial needs or resources and the Court did not take any into account, in fact they found that any money the charities received from the estate was a "windfall". Importantly the Court also found that the deceased had no connection with the charities in her lifetime and that the charities had no expectation to benefit from the Will. They found however that Mrs Ilott was deprived of any expectation primarily because Mrs Jackson had acted in an unreasonable, capricious and harsh way towards her.
In respect of the deceased's obligations and responsibilities to her daughter, the Court acknowledged that Mrs Jackson had no responsibility for her daughter as an adult child living independently. However the Court seems to have placed more weight on Mrs Ilott's resources and needs than her independence. The Court awarded Mrs Jackson nearly a third of the residue to enable her to buy her property and also offered her a further sum to supplement her income.
The case seems to suggest that the Court value non-charitable beneficiaries over charities, notwithstanding the intentions of the deceased. The Inheritance Act has historically been used to protect disabled adult children or those where the parent owed them a moral obligation. However the Court appears to have widened the individuals benefiting to protect those in straitened circumstances.
At this stage it is unknown how the case will change future claims and it is important to remember that this case is fact specific. It has always been open to children of the deceased to pursue a claim under the Inheritance Act however the case of Ilott v Mitson may now encourage those in difficult financial circumstances to pursue claims, particularly where the other parties are charities. If you are considering pursuing a claim it is important to seek specialist legal advice to determine the best way to proceed.
Careful planning and professional Will drafting can help defend against claims, particularly where you are benefiting charities and disinheriting family members.
Your solicitor can discuss with you ways of minimising the risk of a successful claim in the future, including making a Statement of Wishes to accompany your Will. A Statement can explain why you have chosen to benefit certain people or organisations and exclude others. In light of this case it is now more important than ever to clearly explain why you have chosen beneficiaries, especially where they are charities. Arguably it may be necessary to establish a lifetime connection with charities to try and avoid the issues raised in Ilott v Mitson. A Statement gives you the opportunity to acknowledge you have considered your moral obligations and confirm you have capacity.
Your personal and financial circumstances can change over time and this can affect your Will. It is therefore important to regularly review your Will to ensure it reflects your wishes. A review with your solicitor also gives you the opportunity to discuss any changes which may cause a dispute in the future and implement safeguards to protect your wishes.
For further information please contact Jenny Pierce, Head of Wills and Probate on 0117 9292811 or email: email@example.com