Opening doors

Practitioners have tended to advise financially independent adult children that claims by them against the estate of one of their parents under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act) are unlikely to succeed.

The 1975 Act allows certain categories of claimant to claim against an estate of a deceased where “reasonable financial provision” has not been made for them under the will or intestacy of the deceased. Except in the cases of claims by spouses, “reasonable financial provision” is considered by reference to what an applicant requires for their maintenance. In considering claims, the court must take into account the section 3 factors, which include:

• the financial needs and resources of the applicant, any other applicant and any beneficiary both now and in the foreseeable future

• the size and nature of the estate

• any mental or physical disability of any applicant or beneficiary; and

• whether the deceased had any obligations and responsibilities for the applicant.

Cases involving adult children have caused much discussion. For a claim by an adult child to succeed, does there need to be a moral obligation owed by the deceased to the applicant or ‘special circumstances’, particularly when an applicant is in full-time employment and therefore financially independent from the deceased? This was rejected in Re Jennings ([1998] 2 FLR 74) and Re Hancock ([1998] 2 FLR 346). But there has remained, rightly or wrongly, a general perception that adult children may have an additional hurdle to get over compared with other types of applicant.

Value judgments

The situation has now been clarified in the case of Ilott v Mitson ([2011] WTLR 788), which arguably has opened the doors for more claims by adult children. In that case, the applicant was a mother of five, who made a claim against her estranged mother’s estate. (They had fallen out about the daughter’s choice of partner.) The applicant was a stay-at-home mum and the family relied heavily on state benefits. The mother left her estate valued at £450,000 to charity. The applicant was successful at first instance. The decision was reversed on appeal and was subsequently appealed again.

The Court of Appeal upheld the decision at first instance, holding that the original decision was a “value judgment” by the judge on consideration of all section 3 factors and it should not be disturbed unless “plainly wrong”. Lady Justice Arden made the point that the application of “reasonable financial provision” must take account of the circumstances of the case and current social conditions and values.

In this case, the judge had made three value judgments:

• the applicant was entitled to make a life with a partner of her choice and have a family of her own

• it was reasonable for her to wish to remain at home to look after her children; and

• the applicant and her husband were not to be blamed for their lack of income that made a claim for tax credits necessary.

Questions raised

The case raises a number of interesting points. First, it has confirmed that adult children are to be treated no differently to other applicants. It is up to a judge to make a value judgment when considering all the section 3 factors and each case will depend on its facts. Second, while Nicholas Wall stated in his judgment that he did not base his decision “on the ground that a claim under the Act can properly be used to relieve the state of the obligation to support an applicant”, it’s a wonder whether this will be a determining factor in future cases.

Should an applicant be supported by the state when he/she could be supported by an estate? Does an applicant have a stronger claim if the bulk of the estate passes to charity, which cannot defend a claim on a “needs” basis, as opposed to a competing beneficiary? It will also be interesting to see what effect “current social conditions and values” will have on future cases. Will claims be treated differently in the future as a result of changing social values?

What we do not have yet, though, is any new guidance from the courts as to quantum. In Ilott v Mitson, the matter was referred back down to the lower courts for a decision on quantum, but the parties were strongly encouraged to avoid any further costs and try to achieve settlement. While such encouragement can only be correct, it does mean that practitioners have no further guidance to assist when advising clients on what an applicant is likely to achieve.

Sian Hodgson is a private client solicitor in Penningtons’ Basingstoke office