Charities that rely upon legacy income are anxiously awaiting the outcome of the landmark Supreme Court appeal in the case of Ilott v. Mitson. The outcome could result in a surge of adult beneficiaries making claims against their parents’ estates where substantial sums have been left to charity.
Mrs Ilott, who was estranged from her mother, Mrs Jackson applied to the Court under the Inheritance (Provision for Family and Dependants) Act 1975 for reasonable financial provision from her mother’s estate. Mrs Jackson left the majority of the estate, approximately £486,000 to the Blue Cross, the RSPB and the RSPCA, despite not having any connection to these charities during her lifetime. At first instance the court held that Mrs Jackson had acted in an unreasonable, capricious and harsh way towards her daughter and awarded her £50,000.
Mrs Ilott appealed to the Court of Appeal. The court placed great importance on the needs of Mrs Jackson’s family over the non-related beneficiaries that she wished her estate to benefit. The court held that the fact that Mrs Ilott never expected to receive anything from her mother's estate was irrelevant as the charities had not expected to benefit either. Mrs Ilott was awarded £143,000 to buy her property and £20,000 in capital. The award was constructed in a way to allow Mrs Ilott to benefit financially, whilst preserving her entitlement to state benefits. The charities have appealed to the Supreme Court.
The judgment of the Supreme Court is eagerly awaited with professionals torn regarding the impact that the decision will have. Some believe that if the current decision stands it will result in a surge of adult beneficiaries making claims against their parents’ estates and that the current decision undermines the concept of testamentary freedom which needs to be overturned. Whereas some comment that the decision will be limited to the case's unique facts and its impact consequently limited.
Judgment is eagerly anticipated and expected in early 2017.
If you are a legacy officer within a charity and you are facing claims that threaten any legacies left to your charity please get in touch with Bernadette Baker, Marie McMahon or a member of our specialist Charities and Social Enterprise Team.
If you would like to leave money to a charity but are concerned that your wishes might be overturned by the court, please get in touch with Margaret Smith or another member of our Wills and Probate Team.