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Case Law Update

Posted by Private: Judith Rountree

28-03-2014

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Within a recent case based in Jersey, (Estate of Turquand-Young,[November 2013] JRC 235), the Court considered the proper construction of a residuary bequest in a will to eight charities, two of which were the same entity. As the testator was domiciled in England and Wales when the will was made it was interpreted in accordance with English law.

The estate was worth £9million and the residue was divided between eight charities. Two of the charities named were National Society for Cancer Relief and Macmillan Cancer Relief. These names are the previous names of Macmillan Cancer Support and therefore represented the same charity rather than two individual charities. The question was therefore whether Macmillan Cancer Support was entitled to two equal shares from the residue, or one.

Macmillan Cancer Support alleged that it was entitled to two shares of the residue. The remaining charities alleged the residue should be divided into seven equal shares rather than eight. As a result of the disagreement the executor applied to the Court to obtain interpretation on the proper construction of the bequest.

The principles of contractual construction were applied and the Court considered the common sense intention of the testator based on the facts. It was held that the residue should be divided into eight equal shares and Macmillan Cancer Support should receive two of the equal shares.

The reasons given by the Court were as follows:

  1. Where a charity has changed its name before or after a will is made the bequest will take effect as a bequest to that charity, notwithstanding the change in name.
  2. The fact the testator used the wrong name in his will does not of itself make the bequest meaningless and unclear.
  3. It is not possible to know what the testator would have done had he known his mistake.
  4. The testator clearly intended two-eights of the residue to be provided to cancer relief charities.
  5. If the testator leaves the same legacy to the same person, it is presumed to be an error, but it is clear that in this case the testator believed he was dealing with two different charities.

This case demonstrates the importance of confirming the correct name of the charity before making a will, and also demonstrates to wills and probate solicitors the importance of checking charitable bequests are valid. Had such attention been taken the Court’s input would not have been required to interpret the testator’s intention and unnecessary legal costs could have been avoided.

Ilott fails in quantum appeal – does this reaffirm testamentary freedom?

We all know Mrs Ilott brought a claim in 2007 under the Inheritance (Provision for Family and Dependants) 1975 Act on the basis that she was on state benefits, lived in a housing association property and needed financial provision and maintenance from her late (estranged) mother’s estate, from which she had been disinherited in favour of three charities. She brought the claim despite her late mother accompanying her will with letters explaining the reasons for disinheriting her daughter.

At first instance District Judge Million agreed that reasonable financial provision had not been provided. As a result he awarded Mrs Ilott £50,000, which equated to 10% of the estate. Mrs Ilott appealed the level of the award and the charities cross appealed on the basis she ought not to receive any financial provision at all.

In 2011 the Court of Appeal confirmed the decision made at first instance by allowing Mrs Ilott’s claim, stating that in principle she had not been reasonably provided for and was entitled to some financial provision. The charities’ cross-appeal was dismissed and the claim returned to the High Court so that Mrs Ilott’s original appeal on quantum could be decided. i.e. she claimed that in order to be properly provided for, she needed to rehouse her family so that she no longer had to pay rent. To provide her with enough money to purchase a new house equated to half the value of the estate.

It was the quantum appeal which has recently been decided by the High Court on 3 March 2014 (Ilott v. Mitson & Ors, 2014 EWHC 542). Mrs Justice Parker dismissed Mrs Ilott’s appeal confirming that the District Judge’s original award of £50,000 should stand.

Until 3 March 2014, this case had caused some fear in respect of adult children 1975 Act claims, as it seemed to introduce an element of uncertainty. It was also feared that the judgment could be construed as opening flood gates for adult children to claim a share of their parents’ estate, thus restricting the freedom of testamentary disposition and risk of increasing claims against charities receiving residual bequests and legacies.

The modest provision award upheld by the High Court should reduce any uncertainty as a result of the 2011 Court of Appeal decision. Mrs Justice Parker’s judgment suggests that even when the court is aware of the claimant’s poor financial circumstances, a successful claim brought by an independent, adult child may only produce a minimal award and will consider the value of the estate in doing so. This decision therefore appears to limit adult children’s claims under the 1975 Act and reaffirms the testator’s right to dispose of his property as he/she wishes. The judgment should also provide some reassurance to those wishing to leave an estate to charity.


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