Posted by Mike Muston, Senior Associate
Charitable legacies are looking more secure: outcome of Ilott
In March 2017, the Supreme Court ruled on the long running claim brought by Heather Ilott against the estate of her late mother, Melita Jackson. Whilst the Supreme Court’s decision did not represent a significant change in the law and Mrs Ilott was, technically, successful in her overall claim, the decision made by the Supreme Court suggests that charitable legacies may be less open to challenge than previously thought.
Mrs Ilott brought the case after her estranged mother, Mrs Jackson, decided that she did not want to leave her daughter any of her £500,000 estate. Instead, she left it to the Blue Cross, RSCPA and RSPB.
As a result, Mrs Ilott commenced a claim against her mother’s estate under the Inheritance (Provision for Family and Dependants) Act 1975, seeking financial provision. In support of her claim, Mrs Ilott put evidence before the court that she and her family were struggling to make a living on state benefits.
Decisions prior to the Supreme Court and the problem for charities
The court will take into account a variety of factors when considering a claim under the Inheritance Act. Those factors include not only the financial position of the person making the claim, but also the financial position of the existing beneficiaries of the estate.
It was in relation to the latter point that the charities in the Ilott case found difficulty. It was argued (and previously accepted) that the charities could not defend the case on the basis of having any financial need, certainly not compared to an individual who was seeking provision. This was highlighted within the Court of Appeal’s decision, within which it was commented that, from the perspective of the charities, “any money from this estate is a windfall” and in circumstances where the charities had “no expectation” of receiving an inheritance and did not have a financial need, the position of the charities would not be prejudiced if the Court of Appeal felt it necessary to make a higher award.
Ultimately, this is what the Court of Appeal concluded, increasing Heather Ilott’s original award of £50,000 to just over £160,000.
The Supreme Court’s decision
The Supreme Court disagreed with much of the decision of the Court of Appeal and unanimously ruled to overturn its ruling, believing that the original award of £50,000 should not have been increased.
The Supreme Court made clear that the wishes of a deceased person are relevant when considering an Inheritance Act claim. Whilst weight had previously been placed upon the fact that Mrs Jackson had little connection with the charities during her lifetime, the Supreme Court held that Mrs Jackson’s wishes should not simply be set aside on this basis. Mrs Jackson had chosen not to leave her estate to her estranged daughter and the court was entitled (if not required) to take this into account.
With particular reference to the position of charities as beneficiaries, the Supreme Court noted that, whilst their defence was not based on personal need, “charities depend heavily on testamentary bequests for their work.” Accordingly, just because the charities could not claim a personal need, if they were the “chosen beneficiaries” of the deceased person then they do not, in the opinion of the Supreme Court, have to justify a claim to receive the inheritance left to them.
Good news for charities?
This decision alone will not prevent claims being made under the Inheritance Act against gifts received by charities. However it certainly suggests a change of approach by the court. Following the ruling of the Court of Appeal, it appeared that a claimant was highly likely to be successful in a claim against charities, simply because charities could not claim a financial need when defending the claim.
Now, following the decision of the Supreme Court, it would seem that courts will now place more weight on who the deceased person wished to benefit in their Will and, when weighing up the relevant factors, charities will not automatically start on an unequal footing when trying to defend a claim.
The author of this commentary, Mike Muston (Associate), is part of our specialist Inheritance & Trusts Disputes team headed by partner Amanda Noyce. The team are ranked in independent legal directories The Legal 500 and Chambers & Partners, where Amanda is recommended as a ‘leader in her field’. The team is experienced in advising high profile charities on disputes relating to Wills, Estates and Trusts.
For any queries relating to Wills or inheritance disputes contact the team on
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