Helen Ilott, inherits money her mother said she shouldn't have

[YeOldeTrout]

With all the lawyers around MN, any of them care to explain the logic of the ruling that was all over the news yesterday?
Last night talking heads said (roughly) that HI won because her mother hadn't made a proper statement about supporting the charities named, only made statements about disliking Helen. That seems fuzzy to me, though, I mean, since when do wills need to justify the logic of who gets your estate?

I suppose lesson is to give it all away before you die, if feeling spiteful towards obvious heirs.

Drugs? Either dealing, addicted or falling prey to an addict.

Member of an illegal organisation overseas definitely. Member of a cult.

Perhaps membership of a legal but very unpopular organisation such as the BNP?

Sorry. I'm guessing as to why the law was passed, but the government made a law which allows family and dependants to make s claim against an estate.

I would expect if you really want to disinherit someone, you explain your reasons for leaving money to someone else or s charity. A claim is only likely to be upheld if otherwise the family member will be supported by benefits and you make the bequest purely to spite them.

Probably worth putting in a detailed statement of support for charities if you include them in your will.

The fact that it has been through so many iterations of the legal system would suggest that it is a very grey area, and there is no clear cut definition.

I can appreciate the concept of preferring to have an inheritance rather than have to pay out tax payers money. But I wonder - often being on benefits is transitory - at which stage would it be relevant ? At the time of the death of the will owner, or at the time of the judgement ? And I am not sure it is fair to say someone on benefits can overturn (or partly) a will, while those that aren't have to suck it up.

Wills altogether are a pretty odd concept - once you are dead it isn't yours anymore and it makes no difference to you what actually happens any more! Slightly puzzling that through a will you can be controlling to some extent from beyond the grave.

I thought the 1975 Act applied if you were supporting a dependant, not to adults depending on the state which is the interesting point. Also in my view you leave money equally to children and if one has been lazyenough never to have worked you don't give them more than one who has worked their socks off for 40 years yet here the courts seem to be saying that if you don't earn much and live on benefits poor diddiums we will force money from your dead parent but had you been in a stable employment on no benefits they we would not reward your endeavour. So a pat on the back to the idle and benefits claimants really and an incentive not to work much as if this situation occurred againt hard workers get not a penny whilst leeches do!

Much as it pains me to agree with RDR, does seem like perverse incentive, indeed.

Give it all away before you die, deffo!

is it right to say that the crux of the judgement was about the portion of her inheritance from her dad, who wasn't able to express a preference to disinherit her

No, that is wrong. The recent judgement specifically ruled that out as a factor.

I kind of hope Helen I's current dire economic straits weren't part of the legal reasons for her to get the money

It may not sit right with you but that is the crux of the matter. As I've already explained the basis for the decision was that, in the view of the court, it was unreasonable for Mrs Ilott's mother to fail to make financial provision for her in her will given Mrs Ilott's dire financial situation.

By the way, her name is Heather, NOT Helen.

So the reason for the judgement is because it benefits HM-Treasury

No. Again, that didn't enter into it. Indeed, the amount awarded was designed, in part, to try to avoid reducing the level of benefits Mrs Ilott receives from the state (other than housing benefit).

I thought the 1975 Act applied if you were supporting a dependant

That is only one of the situations in which it applies. Spouses, co-habitants and children can claim even if they are not dependent on the deceased. Their claim will generally stand a better chance of success if they were dependent on the deceased but there is nothing in the Act that prevents a claim from a non-dependent adult child succeeding.

if you don't earn much and live on benefits poor diddiums we will force money from your dead parent but had you been in a stable employment on no benefits they we would not reward your endeavour

Ignoring the emotive language, it does not seem to me in any way unreasonable for the court to take the view that a parent has a greater duty to support a child who is struggling financially than one who is comfortable. Suggesting that this provides a perverse incentive seems to me to be very wide of the mark. The bulk of the settlement is to allow Mrs Ilott to buy her house from the housing association, thereby removing the need to pay rent (which is, in any event, met by housing benefit) and potentially allowing her to raise money through equity release in future. The cash left after the property has been purchased will give an income of around £331 per year. I really don't think this judgement will result in people choosing to live a life on benefits in the hope of getting a bigger inheritance from their parents.

Give it all away before you die

That doesn't work. If the court believes that you have given away (or sold cheaply) some or all of your estate in the 6 years before your death with the intention of preventing someone claiming under the Inheritance Act the court can order the recipient of the gifts to pay the claimant. So, even if Mrs Jackson (Mrs Ilott's mother) had given everything to charity before she died Mrs Ilott may still have been able to claim from the charities.

How does it play then (I suppose I mean the 1975 Act) with adult children and a second wife. There must be countless cases where the ex husband leaves his money to his new wife and nothing to adult children. Can those adult children use the 75 Act to ensure they are not left out of his will and if we applied it to our situation where my children's father I think is just now remarrying (although I suspect he will do a new will including the children but he may not) if he left everything to the new wife then presumably under the 75 act my postman son could make a claim on the estate but not my lawyer daughters?

if you don't earn much...

Just to add that the court looks at earnings capacity as well as the current financial situation. If Mrs Ilott was capable of holding down a well paid job but chose to live on benefits the outcome would probably have been different. In this case the courts found that her earnings capacity is minimal and that she cannot earn enough to support herself without state benefits.

How does it play then with adult children and a second wife

The adult children can certainly try to make a claim against the estate. Whether or not they would succeed depends on the circumstances. The court has to decide whether excluding the children from the first marriage is unreasonable. So, looking at the situation you describe, your postman son would probably have a better chance of success than your lawyer daughters but there is no guarantee any of them would succeed. The courts may decide that all your children are perfectly capable of standing on their own two feet and therefore it is not unreasonable for them to be left out of the will.

Thanks. I suspect it would be extremely risky for my son to keep on a relative breadline in the hope that in 40 years when his father dies he might get more money when he will probably have inherited some from me anyway before that as my family seem to die in their 70s and the other side over 90.

I am certainly glad we don't have a French system and too much control over inheritance. I think we have it about right in the UK. I will certainly leave everything equally even if one child made better decisions than another and thus earns more. it might be different if one were disabled although there it might be wise they got nothing so that benefits were not affected. Interseting that in that case the court was in effect benefits cheating/planning which I thought this Government thought was morally pernicious even if lawful!

The bulk of the settlement is to allow Mrs Ilott to buy her house from the housing association

Is there any obligation for her to spend the inheritance on that ? Could she choose to blow it all on a round the world trip ?

The other thing that puzzles me - it has taken 7 years to go through this process - surely her circumstances could (maybe likely) have changed in that time. And presumably the original will may well have been written quite a while before that. I assume there is no obligation on a will writer to reassess their will regularly based on the status of their adult children ?

It seems to me that the law as it stands has no certainty and gives potential inheritors the opportunity to undertake a potentially lengthy legal process in the hope of getting a share of an inheritance.

Bear in mind that some people will specifically draw up wills to maximise benefit entitlement. One of the reasons for a will "skipping a generation" is because a legacy might be used for care home fees which would otherwise be paid by the local authority. Or if you have a medium sized estate of 120,000 and four children, one of whom is on significant savings-dependent benefits you could exclude that child from the cash portion of the will to avoid them losing their benefits entitlement.

Yes indeed which is why I prefer Governments who are honest and say lawful tax avoidance is fine (morally right even) and the only distinction we need is between what breaks the law and what does not but that if you minimise your affairs to pay the least tax there is nothing wrong with that.

Is there any obligation for her to spend the inheritance on that

The judgement specifically states that she is being awarded "the sum required for the appellant to purchase the Property where she and her husband currently live plus reasonable expenses of acquisition". That suggests she will have to buy the property but it depends on the wording of the order made by the court.

surely her circumstances could (maybe likely) have changed in that time

In 2007 Mrs Ilott and her husband had a combined income of around £4700pa. That has now risen to around £7,500, the bulk of which is earned by her husband. She has no savings and no pension.

I assume there is no obligation on a will writer to reassess their will regularly based on the status of their adult children

None whatsoever.

if you minimise your affairs to pay the least tax there is nothing wrong with that

The courts have consistently taken that position.

How does it play then (I suppose I mean the 1975 Act) with adult children and a second wife. There must be countless cases where the ex husband leaves his money to his new wife and nothing to adult children

that was the very reason behind the 1975 legislation - it was to stop wives and children being left destitute by men leaving all their money to their mistresses
The act isn't just used for wives / children - I was involved in a case where the mistress made a claim against the children's inheritance. Given that the (adult) children didn't know about her, it was something of a surprise.

If the court believes that you have given away (or sold cheaply) some or all of your estate in the 6 years before your death with the intention of preventing someone claiming under the Inheritance Act the court can order the recipient of the gifts to pay the claimant

So if my business does a £10,000 job for a client. And six years later, a court decides that client (unbeknown to me) was frittering away their estate to annoy their offspring, I'd have to stump up ?

Or is there more to it ?

no but if your mother sells you a Van Gogh painting for £25 and dies within 7 years, the true value of the painting will be considered to be a part of her estate for IHT purposes, but with tapering relief depending on when over the next seven years she died (ie if she died the next day, no relief, but 6 yrs 11 months later, max relief)
It's preventing making gifts being made with the purpose of frustrating IHT rules

That would be a genuine commercial bit of work so you'd be okay unless you didnt' do £10k worth and were trying to help a friend avoid paying out to his family or ex wife.
The 1975 has always been fairly hard to invoke and I don't think this changes it. there is an article in the Solicitor's Journal on this case which I just read. It also explains the act was changed so that someone supported such as a grandchild can make claims I think it said.

The bottom line is that it remains the law that you can leave what you like to whoever you like. However if you totally exclude certain relatives etc then they might bring a claim like this later.

It's preventing making gifts being made with the purpose of frustrating IHT rules

But there is a difference between IHT and the I ?

So a spiteful person could happily blow their estate on lottery tickets the week before they die, and its "tough luck suckers" to any hopeful beneficiaries ? No intent to avoid IHT - just an intent to piss the legacy away before the brood can get it.

(Should go without saying this is all assuming sound mind etc).

yes, a person is completely free to spend their own hard owned cash on whatever they elect to spend it on during their lifetime provided they're not doing it to dodge tax. If Mrs Ilot had spent her money on lottery tickets (hopefully without then winning the jackpot), her daughter would have got nothign and would not have a claim against Camelot for her upkeep.
Because Mrs Ilot was a sensible spender who made provision for her own future but died before spending it all, she was deemed to be required to make provision for a child who ran away from home decades ago adn who had no wish whatsoever to see her mother in her lifetime. New found money or not, Heather comes across as a vile human being.

If Mrs Ilot had spent her money on lottery tickets (hopefully without then winning the jackpot)

Why did I suddenly think of "Springtime for Hitler" ?

Wow Jane such vitriol. I absolutely do not agree. She didn't 'run away from home', her mother disagreed with her marriage. The Judge who, unlike you, heard all the facts, decided that in fact the mother had been totally unreasonable.

The mother decided to leave all the family money away from her child from sheer spite, that strikes me as a lot more 'vile'.

no vitriol, but equally no relationship or DEPENDENCE established whatsoever, which is why this one is so striking. For decades, the two had not communicated. It's provision for financial dependents, and this adult woman who saw the deceased twice in 25 years was in no way dependent on her for finances and had not been since before she severed the relationship. She left home as a teenager to move in with a boyfriend - i think "running away from home" rather covers that?

text from the mother's letter accompanying the will:

"My daughter left me on Sunday 19 February 1978 when she was only 17 years of age. Whilst I was still sleeping she crept out of my house during the early hours of the morning. I later discovered that she was living with a man named N Ilott. Mr Ilott’s mother had allowed my daughter to live with the family at Great Munden, Hertfordshire. In spire of all my efforts to reconcile with her she did not return home. My daughter asked that I contact her no more.

I have only seen my daughter twice since she left home, on my 60th birthday and in May 2001. My daughter now has five children and I have not seen any of them since my 60th birthday.

My daughter has been extremely deceitful to me and has told me a number of lies.

Because my daughter left me without any explanation and has made no effort to reconcile with me I feel as though I have no moral or financial obligation to provide for her. 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. "

much of this one turns on the particular facts and the language of the letter and the relationship with the two charities however so I don't think it's necessarily the earth shattering change that the press have made it out to be

Yes, it will remain fine to leave the house to the second wife and exclude the children particularly if they are adult and not dependent on you. I don't like this idea that if the adult child is on a lower income they may get more than would otherwise be the case but that is consistent with the 1975 Act which is about provision for "family and dependents"

You remain free to give your money where you choose before you die although as someone rightly pointed out if you die within 7 years there may be inheritance tax to pay (which was the case with my late father who died about 3 years after he gave us some money from our mother's estate). The gift is not unlawful. The potential liability to IHT lurks though.

So in fact the solution here for the mother could have been to give everything to the charities 10 years before she died taking advantage of tax relief? Would that work?

It's provision for financial dependents

As I have already explained it is not just provision for financial dependents. The clue is in the title of the Act - Inheritance (Provision for Families and Dependents) Act 1975. Spouses, cohabitants and children have always been able to claim even when they were not dependent. The claim would only succeed if the will was unreasonable. In general excluding an adult child who is not a dependent is not unreasonable but in the specific circumstances of this case it is.

JaneAustinAllegro - The mother was Mrs Jackson, not Mrs Ilott. The courts found that the letter you quote contains a number of factual inaccuracies.

More generally we seem to have scooted off into IHT. The provision about gifts and selling assets for less than their true value is about the Inheritance Act, not IHT.

Looking at IHT, when you die it may be necessary to pay IHT on anything you have given away in the previous 7 years.

Turning to the Inheritance Act, if you give away (or sell cheaply) your possessions and/or your money in order to prevent a family member or dependent from inheriting and die within 6 years the recipient of your largesse may have to cough up. If, on the other hand, you sell all your possessions for their full value, spend everything on alcohol and drink yourself to death no-one will be able to claim anything under the Inheritance Act.

I should point out that the charities still have the option of appealing this decision to the Supreme Court. That would allow them to re-open the question of whether or not Mrs Ilott is entitled to inherit anything (which was decided by the Court of Appeal in 2011, not in the latest judgement as the press have generally reported) as well as challenging the amount awarded.