Recently, there have been several high-profile cases involving successful legal challenges to Wills by disinherited family members. One case you may have heard of is Ilott v Mitson EWCA Civ 797. The way these cases are often portrayed might lead you to believe such challenges cannot fail. However, the more recent case of Ames v Jones  EW Misc B67 (CC) demonstrates that these claims are far from automatic successes.
The Background of the Case
Michael Ames’s Will provided that his entire estate should go to his wife of 12 years, Elaine. However, if Elaine died before him, 40% of Michael’s estate would go instead to Danielle – his daughter from a previous marriage – and the rest would be shared amongst Michael’s grandchildren.
In the mid-1990s, Michael gifted Danielle his first business and provided her with capital to run it. Danielle gave up the business in 2003, however. When another business was set up by Danielle’s husband in 2005, Michael also provided some help with start-up costs. The extent of Michael’s help and the degree of Danielle’s involvement in this second business would later be disputed by the parties in the case.
When Michael died in 2013, his estate was valued at over £1 million, mainly due to the worth of his businesses and the property he had acquired in London. As his wife Elaine survived him, the whole of this estate went to her.
Danielle brought a legal challenge against the Will, claiming that reasonable financial provision should be made to her from Michael’s estate. She relied upon the Inheritance (Provision for Family and Dependants) Act 1975 (IPFDA). This allows children, spouses and other specific people who are financially reliant upon the deceased, to claim a measure of the estate to support them. In effect, it seeks to alter the operation of a Will to provide for the applicant. Also, in situations where the deceased made no Will, an IPFDA claim can be used to change the effect of the intestacy rules.
In deciding whether an IPFDA claim should succeed, and what a ‘reasonable financial provision’ would be in the circumstances, the Court will assess a number of different factors. In Danielle’s case, the Court considered:
- Danielle’s financial resources and needs and what they were likely to be in the future
- Elaine’s financial resources and needs, as the current beneficiary of Michael’s estate, and what they were likely to be in the future
- Any obligations and responsibilities Michael had towards Danielle in life
- The size of Michael’s estate and how it was made up, i.e. how practical it would be for a share of the estate to be given
It is also for the person making the claim, Danielle in this case, to prove that it should succeed.
The Court’s Decision
In respect of her financial resources and needs, the Court found Danielle to be a particularly unreliable witness. They noted numerous contradictions in her evidence. Where her statements referred to Michael’s help with the 2005 business, one statement alleged Michael had provided materials from time-to-time, and another alleged that he had paid a deposit on a shop and given Danielle whatever the business needed. Similarly, Danielle’s details of her current income and debts were remarked upon as being inconsistent.
As such, the Court was unable to determine whether Danielle had any financial need at all. In a damning section of the judgment, it was noted that Danielle did not work even though there appeared to be nothing stopping her from doing so. The judge accordingly concluded “that [Danielle’s] lack of employment is a lifestyle choice. That alone is sufficient to defeat her claim.”
Furthermore, Elaine, the sole beneficiary of Michael’s Will, was considered to have greater need for the estate money. The Court found that she had a modest income from the estate assets, but believed any reduction in the estate would result in Elaine being unable to maintain herself.
Coupled with this was Elaine’s age and poor health. Danielle, by contrast, was younger and fit to work and so, when considering the parties’ competing needs, the Court deemed her much more able to support herself through other means.
One of Danielle’s arguments to support her claim was that her father had promised her that ‘one day it would all be hers’. The Court however refused to accept that Michael would say such a thing and intend to leave Elaine with nothing.
As an aside, Michael’s alleged statement may, in theory, have given rise to a claim for estoppel (see our previous article on this subject for more information). However, even if the Court had accepted the occurrence of such a statement, Danielle does not appear to have suffered any detriment from relying upon it. An estoppel claim would therefore have been very unlikely to succeed.
As a result of her claim’s failure, Danielle was ordered to pay Elaine’s legal costs, which totalled around £85,000. A partial payment of £34,000 was ordered to be made within 14 days. On top of this, Danielle incurred her own legal costs of £47,000.
The case could be seen as supporting the principle that a person’s Will should be respected and not altered without good reason. However, this judgment was not decided purely on principles; it turned instead on Danielle’s failure to prove that she had a legitimate need for financial provision. Even if Danielle had proved this, she would still have been required to show that hers was the greater need when compared with Elaine’s.
There is some evidence to suggest that inheritance disputes of this kind are becoming increasingly common. Danielle’s claim, if anything, shows how potentially ruinous they can be for an unsuccessful applicant. As mentioned before, the case also demonstrates how such cases are far from being foregone conclusions; they each revolve around their own circumstances and are therefore difficult to predict with any certainty.
If you would like discuss any of the issues raised in this post, please do not hesitate to contact us.
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