Inheritance (Provision for Family and Dependants) Act 1975
Date: 12 December 2016
The Supreme Court is to hear the appeal of three charities to affirm the importance of testamentary freedom and secure crucial guidance for the future*
The Supreme Court will on 12 December 2016 hear the appeal of Blue Cross, RSPB and RSPCA of a decision of the Court of Appeal in 2015 making an award out of the estate of Mrs Melita Jackson to her estranged daughter Mrs Heather Ilott despite her firmly stated intention to benefit only the charities. This is the first time the Supreme Court will be asked to consider the provisions of the Inheritance (Provision for Family and Dependants) Act 1975.
Mrs Jackson made clear in her will that her entire £500,000 estate should be left to the charities to help animals and wild birds in need, and she specified that none should go to her daughter from whom she had been estranged for 26 years and who had been financially independent from her for more than two decades.
Mrs Jackson had written a heartfelt letter to accompany her Will in which she explained her decision and instructed her Executors to defend any attempt by her daughter to contest it.
In the letter Mrs Jackson wrote:
"My daughter has not been financially reliant upon me since she left home, although I did make gifts of money to her on her birthday and at Christmas up to and including her 21st birthday, although she refused to acknowledge any of the payments that I made to her.
If my daughter should bring a claim against my estate I instruct my Executors to defend such a claim as I can see no reason why my daughter should benefit in any way from my estate..... I have made it clear to my daughter during her lifetime that she can expect no inheritance from me when I die".
My Executors should use this letter as evidence in any Court proceedings as they think fit."
(The letter was signed and duly witnessed on 16th April 2002; Mrs Jackson died two years later.)
Despite her mother's wishes, Mrs Ilott applied to court for provision from the estate. In 2007 she was awarded a lump sum of £50,000, just over 10% of the estate, to provide for her 'maintenance needs'. Appealing to the Court of Appeal on 27 July 2015 she argued that a lump sum of more than £16,000 would deny her the right to certain State benefits, and that only the provision of enough money to buy her home outright would be reasonable financial provision for her. The award was more than trebled to £163,000.
Testamentary freedom is a well-established principle in English law. The charities have appealed this decision in order to obtain essential clarity from the Supreme Court regarding the scope of the Court's power to interfere with a person's testamentary wishes using the 1975 Act. Guidance provided by the Supreme Court should give greater clarity to those making their wills as to the extent of their testamentary freedom when choosing their beneficiaries. Charities rely upon income from generous legacies of the type made by Mrs Jackson to undertake their invaluable work. According to the Institute of Fundraising nearly £2 billion a year is donated to charitable causes through legacies, and without it much of their work would not be possible.
The charities' position on testamentary freedom is that, while people in this Country have the right to decide for themselves how and to whom they wish to leave their estate, the extent of the Court's power to override the choices any of us make in our Will must be carefully controlled and clearly understood. This is contrary to the Respondent's position, which is that she does not accept that in exercising its discretion under the 1975 Act, the court should seek to do as little damage as possible to the testator's wishes.
An important part of the charities' case is that charities should not be considered any less deserving than other types of beneficiaries - a point of principle the Response in fact agrees with in her case.
Greater certainty as to the Court's use of these important powers will benefit not only the charities involved, but also the charity sector as a whole and the general public. It will give clarity to those making Wills as to how much of their estate they are free to give away as they wish and reassurance that their wishes will be respected. It will make it easier to settle claims under the 1975 Act. For the charities, it will help to protect a source of income that is essential if they are to continue the work they do.
James Aspden, a Partner at Wilsons Solicitors who is representing the three charities, said:
"The Supreme Court will only hear an appeal in exceptional circumstances, where the issues it raises are of general public importance. The importance of this case on public policy grounds is evidenced by the court, unusually, sitting with seven rather than the usual five, Supreme Court Justices. The charities trust that the Court will provide essential guidance on the scope of the court's powers under the Inheritance Act, and clarify the other important issues this case has highlighted."
In a joint statement, the charities said:
"We are immensely grateful for the generosity of those who leave a gift to a charity about which they feel passionately. Their generosity is vital to the valuable work that we do and we take very seriously our duty to honour the wishes of our generous supporters who choose to remember us in their will. We look forward to the resulting clarity that the Supreme Court decision will be able to bring for the charity sector as a whole, and to the renewed confidence that a clear decision at the highest level will give to those making their wills, that their wishes will be respected."