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Before today (15 March 2017) the Supreme Court had delivered its Judgment in 16 cases since the beginning of 2017. Judgment number 5 of 2017 was undoubtedly the most reported: the “Miller-Brexit” case addressing the role of parliament in triggering Article 50. It would have been ironic had Judgment number 17 taken the law of inheritance and succession firmly in the direction of European style “forced heirship” whereby a testator’s testamentary freedom is fettered in terms of what they are obliged to pass to their children. The reporting of the Court of Appeal decision in Ilott v Mitson in summer 2015 which hit the popular press might have suggested that forced heirship was already upon us. What was the point of even writing a will, they asked, if the contents can be disregarded by judges?
The much anticipated judgment in the same case by the Supreme Court has certainly not moved in the direction of forced heirship. It restates the law whereby, long prior to the 2015 Court of Appeal decision in this litigation, claims against an estate by adult children of a testator have been possible under the Inheritance (Provision for Family and Dependants) Act 1975, and will be decided on the particular facts and circumstances of each individual case, taking into account what is reasonable financial provision and the factors stated in the Act. Some succeed. That remains the case. In this case an award was made from an estate for a financially independent, able-bodied child who was long estranged from her mother, and despite her mother’s express wishes that she should not inherit anything.
Today’s decision follows a complex history of appeals and cross appeals over a decade. The fundamental basis of this final judgment by the Supreme Court is that the original trial judge (in 2007) had not been wrong in taking his original approach. In deciding to make an award he had given weight to the two key features of the case: the estrangement between mother and daughter and the daughter’s straitened circumstances, in deciding to make an award. Further, as to that award arrived at, he was entitled to take a “broad brush” approach, which he had had to do due to the poor quality of the information and evidence before him at that time. Accordingly his decision should not have been interfered with by the Court of Appeal.
The Court of Appeal had wrongly taken what commentators had called a more interventionist and “creative” approach and arrived at a different award. The original trial judge had considered the fact that a large award would affect the Claimant’s entitlement to state benefits, and he had arrived at the £50,000 to provide some additional income and purchase of non-luxury items which were needed, such as household appliances and a new car. He had declined to give an award to allow the Claimant to buy her rented home. The Court of Appeal award was based on enough to buy the home (£143,000 as it was thought at that time) plus a lump sum of £20,000 to provide a small amount of additional income. As the original trial judge’s approach was not wrong it was not appropriate to do that.
It is, however, worth remembering that the Court of Appeal approach only increased the award from 10% of the estate to 32% of the estate (which was overall worth £486,000). Further, even the Court of Appeal stated (of the £20,000 element) “this is not a large amount because of the factors that weigh against her claim, particularly the fact that she is an adult child living independently”.
The Supreme Court rightly gave a reminder that reasonable financial provision should be by reference to maintenance, not capital, and is assessed in terms of need. However, “need” is not necessarily subsistence level. Maintenance, the Supreme Court says is “flexible and falls to be assessed on the facts of each case”. Generally, awards in respect of property will be in terms of a life interest in a home. In terms of the two stage approach (to look at the question of whether reasonable financial provision has been made, and then what award should be made) the Supreme Court has commented that there can be nothing wrong with a “broad brush” approach, as indeed had been taken by the original trial judge in the lower court where the judge had, due to the lack of information before him needed to take a “rough and ready” approach on the financial needs.
The Supreme Court found that the original trial judge, DJ Million, took into account relevant factors in particular the estrangement between mother and daughter and he had given weight to the mother’s testamentary wishes in arriving at his award. The judgment underlined the importance of the testator’s testamentary wishes but nevertheless stated “Testator’s wishes may of course be overridden but they are part of the circumstances of the case and fall to be assessed in the round together with all other relevant factors.” It must follow that they are not paramount in every case. This underlines that cases will be highly fact sensitive and a trial judge has considerable discretion to weigh the factors they consider relevant in each case.
It clarified, however that in assessing reasonable financial provision “need” may not be enough and the Supreme Court commented that “the presence or absence of a moral claim will often be at the centre of the decision under the 1975 Act”. It must be that what amounts to a “moral claim” is subjective and relates to the conduct of the testator and the adult child respectively. There will often be competing evidence as to conduct and who was in the “right” and who was not. Conduct is, of course already a factor to be considered under the Act. On this the Supreme Court said “These matters of conduct were not irrelevant but care must be taken to avoid making awards under the 1975 Act primarily rewards for good behavior…or bad”.
The charitable residuary beneficiaries may take heart that the appeal succeeded, and that helpful comments were made to say that the importance of charitable legacies should not be overlooked when making awards. However, this ruling does not extinguish the potential success of future adult child claims, even in the case of a financially independent able bodied child. The Supreme Court made clear that there is an unsatisfactory lack of clarity in terms of the precise weight to be given to different factors, and this has been overlooked by the Law Commission in the most recent review of testamentary matters. In the careful weighing of different factors and their relevance, it remains that every case of this type will turn on its particular facts, circumstances, and the quality of the information provided to the Court.