Can you disinherit your children if you want to?


Author: Helena Luckhurst


This article is taken from Helena Luckhurst’s blog The Wealth Lawyer UK

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 posts 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.

Helena Luckhurst, Partner, Fladgate LLP (hluckhurst@fladgate.com)

 

 

Would you like to hear more?


View by date:


View by author: