You may recall that, a couple of years ago,
the English press was full of reports of the Will case of Ilott v Mitson.
(For some background on the case, see my 2015 and 2017 blogs about it.)
The case was of interest to any testator who
is considering cutting out children from their Will. However the Ilott
case has now been applied in the more recent case of Nahajec v Fowle [2017] EW
Misc 11 (CC), in which another impecunious child applied to the court and was
successful in obtaining provision from her father’s estate, contrary to her
father’s express wish that she should receive nothing. So what can the Nahajec case teach us about whether it
is possible, even, for parents to successfully exclude adult children from
receiving any inheritance from them?Under the Inheritance (Provision for Family
and Dependants) Act 1975, children may apply to court for such provision as
‘would be reasonable in all the circumstances of the case for the applicant to
receive for his maintenance’, which case law has determined means ‘provision to
meet the everyday expenses of living’ and can extend to the payment of a
child’s debts. A successful application to court can result in the terms
of the deceased’s Will being overridden, if ‘looked at objectively, his
disposition or lack of disposition produces an unreasonable result in that it
does not make any, or any greater, provision for the applicant’. The test is not one of whether the deceased acted
unreasonably. The assessment of whether reasonable provision has been
made is to be carried out by the court objectively but, in doing so, it must
have regard to a number of factors set out in statute. The deceased’s
wishes are not expressly stated as one of them but the court can have regard to
‘any other matter, including the conduct of the applicant or any other person,
which in the circumstances of the case the court may consider relevant’.
In this case, Stanley Nahajec had not been
in recent contact with any of his three children at the date of his
death. He had two sons from his first marriage and a daughter from a
later relationship. He left his £266,000 estate to a long-standing
friend, who himself was in some financial difficulty. By the time the
case went to court, one son, who was prevented from working due to disability
and ill health, had applied to the court for maintenance from the estate and
had been paid £22,000 (it is not clear whether this was a settlement negotiated
before the matter went to court, or a judgment). The other had chosen not
to claim and therefore this case concerned the 31 year old daughter who,
despite a recent health scare, was in low paid employment. However,
she had fallen into significant debt.
In a letter of wishes accompanying his Will,
the deceased explained that he was estranged from his children but he thought
that all his children were ‘sufficiently independent of means not to require
any provision’ and therefore it was not appropriate or necessary to make
provision for them. In his lifetime, the deceased was in the habit of
putting the phone down on his daughter when she tried to contact him and gave
her no financial assistance.
The statute’s requirement for objective
financial provision for maintenance seems difficult to overcome in the case of
children in straitened financial circumstances. The wishes of the
deceased are not the last word on the matter. The financial resources,
financial needs and conduct of any applicant, and of the estate’s beneficiaries
named in any Will or under the intestacy rules, are relevant to the court’s
determination. While a testator can choose the extent to which contact or
assistance is given by him in his lifetime, he cannot completely control the
financial circumstances of his children, of course. For that reason
alone, the Nahajec case underlines,
once again, that there is no concept of unfettered testamentary freedom under
English law and it is not possible to guarantee the outcome of any application
to court by a child of the deceased unless, perhaps, the child is an adult and clearly
standing financially on his own two feet.
So is there anything
that can be done? It is not possible to oust the jurisdiction of the
court to prevent children applying to claim for provision. Testators
might consider making provision for a life interest for a child, to provide the
child with income for maintenance, whilst preserving the capital required to
support the life interest in trust for the preferred heir, after the child’s
death. Alternatively, in anticipation of a capitalised maintenance award,
as occurred in the Nahajec case, a
life policy written in trust could be taken out to provide a capital sum to be
used to pay off the child. Testators should also be aware that if there
is a need to obtain a grant of probate after death, the value of the testator’s
estate becomes public knowledge and may encourage children to apply.
However, with careful planning it is not always necessary to obtain a grant
after death.
