People often ask me if they can leave this person or that person out of their Will. The answer isn’t as simple as one might think.
The starting point is that English law recognises the freedom of individuals to dispose of their assets by Will, after death, in whatever manner they wish. In other words, as long as you make a valid Will you can leave your worldly belongings to whoever you choose. Of course, this article wouldn’t be worth writing if it all ended there, so as you might imagine, there is a ‘BUT’. A little Act called the Inheritance (Provision for Family and Dependants) Act 1975, more commonly referred to as the 75 Act, which adds a little spice into the mix.
Some may remember the case of Ilott v The Blue Cross and Others that went all the way to the Supreme Court not too long ago. Mother and daughter had a fallout over the man the daughter chose to spend her life with, and a 25-year ding dong ensues which ends with the mother leaving her entire estate, nearly half a million pounds, to three feline charities. What made the move all the more catty was that she had never supported the charities in her lifetime, and in fact as far as I am aware, she didn’t even have a cat. No doubt there were two sides to the story but save to say that mother and daughter never kissed and made up.
On the mother’s death, the daughter claimed under the 75 Act and was eventually awarded £50,000 by the Supreme Court which overturned the Court of Appeal’s award of £143,000. Any award in itself was quite a decision given the mother expressly disinherited her daughter, left a letter to explain her reasons, and yet the Court still awarded £50,000. So much for leaving your money to whoever you want then.
Context is critical here and it’s important to note that the daughter, Heather Ilott, was of limited means and lived in housing association accommodation and the family’s main income source was state benefits. The claim she made was for ‘reasonable financial provision’. She was a child of the deceased so an eligible claimant, and she had clear financial need.
The last year has thrown up another couple of interesting reasonable financial provision cases, and the first, Lewis v Warner, actually not involving money per se.
To set the scene for the case, categories of the claimant under the 75 Act include a spouse or civil partner, former spouse or civil partner, cohabitee, a child or someone treated as a child of the family or someone who was financially dependent on the deceased.
Cohabitee claims are rarer than unicorns, and last December, 91-year-old Mr Warner, who cohabited with the deceased for nearly 20 years in her property, was asked to leave by the deceased’s daughter, Mrs Lewis, so she could sell it.
Mr Warner was significantly better off than the deceased and he had more than enough money to buy himself another property, so one might think that a financial provision claim might be weak. There was also never any understanding between Mr Warner and the deceased that he would have an interest in her estate and in fact, being older, he had expected to die before her. He was, however, in poor health and assisted by his neighbours. Any move from the property would have caused great upheaval.
The court at first instance ordered that the property be transferred to Mr Warner in exchange for £385,000. It had been valued at £340,000. The first appeal by Mrs Lewis was dismissed and she appealed again to the Court of Appeal who had to consider two points:
Was the original decision correct that the Will did not make reasonable financial provision for Mr Warner?
Was the judge entitled to make the order that he made?
The Court of Appeal held that ‘maintenance’ could extend to the provision of a house for a claimant to live in and that as the deceased had in fact been providing a home for Mr Warner he was being maintained by her, and considering all the circumstances he needed that maintenance at that particular property to continue rather than moving house.
The Court of Appeal also upheld the decision at first instance stating that while the order may have been an unusual one, Mr Warner’s needs were for a specific property and the precise financial value of the property was less important to him than the value the property itself. The decision shows the range under the Act and that maintenance needs do not necessarily have to be purely financial.
More recently, Joan Thompson, a 79-year-old lady brought a claim against her late partner, Wynford Hodge’s estate, valued in the region of £1.5m. The couple had been in a loving relationship for 42 years in which they lived as ‘man and wife’, though critically to this case, they never actually married.
Mr Hodge left his entire estate to two tenants on his farm believing firstly that Joan had a significant wealth of her own, and secondly, that her health, in his opinion, precluded her from living there independently.
Unfortunately, Mr Hodge was very much mistaken and Joan Thompson had little more than £2,000 to her name, and in addition, she believed that she was more than capable of living independently.
The Court held that Joan was entitled to “such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for maintenance” and awarded her a property valued at £225,000, a sum to cover renovation costs and £160,000 for future maintenance and care. The total came to around £415,000, just under 28% of the estate.
Interestingly, had the couple been married she may well have received much more because a different standard applies to surviving spouses and civil partners.
A stand out point is that in Ilott the award was significantly lower as a percentage, being just over 10% of mother’s estate. The Courts look very closely at specific needs when calculating maintenance.
In conclusion, you can still leave your money to whoever you want as long as you provide for those you ought to, even though you might not want to.
Confused? Well, the bottom line is the 75 Act is there to protect those that are eligible and have a need for the provision of maintenance. There are ways to make your case for disinheritance stronger if you want to, but you need to get the right advice. It certainly isn’t something you should try at home unless you’re suitably qualified of course.
The information provided in this article is not intended to constitute legal advice and you should take full and comprehensive legal advice on your individual circumstances by a fully qualified Solicitor before you embark on any course of action.
Wills, Trusts and Probate team
020 7183 1485