Disinheriting your children: Ilott v Mitson, succession policy and Scottish law reform

I thought I might take advantage of the surprising (to me anyway) media interest in the English Court of Appeal decision in Ilott v Mitson to raise a couple of questions about the current Scottish succession consultation. The key question here is: should parents be able to disinherit their children? Your answer could be: (a) Always; (b) Never; or (c) the very lawyerish In Certain Circumstances.

England plumps for option (c). The default position is that a parent can disinherit their child if they so wish. However, the Inheritance (Provision for Family and Dependants) Act 1975, ss1-2 allows a child to ask the court for money from her parent’s estate where “reasonable financial provision” has not been made for her. The Act lists various factors the court should take into account in determining whether “reasonable financial provision” has been made, and if not, how much money the child should receive to make up for it. That list includes the child’s current and future financial needs and resources, and the needs and resources of any competing beneficiary.

In Ilott, the appellant was the adult child of the deceased Mrs Jackson. Mother and daughter had been estranged for 26 years prior to the death, three attempts at reconciliation proving unsuccessful. Mrs Jackson had left her £486, 000 estate almost entirely to three charities with which she had no particular connection in life – the Blue Cross Animal Welfare Charity, the RSPB and the RSPCA. Her daughter, who by this point had raised five children, lived with her husband in a council house, dependent on benefits.

Awards under the 1975 Act tend to be made to a disinherited child where: (i) the child is under the age of majority on her parent’s death; (b) an adult child has remained dependent on her parent as a result of disability, or; (c) a particular moral obligation is deemed to have arisen, for example, where an adult child has taken care of her parent in old age. The fact that none of these circumstances arose in the Ilott case seems to be the source of the consternation about the decision in the media reports, but the legislation does not restrict awards to these circumstances. The court found an award to Mrs Ilott “reasonable” because of her straitened financial situation, which seemed likely only to deteriorate as she grew older, in combination with the fact the competing beneficiaries – the charities – had no needs and resources to be taken into account. The court did not consider it relevant that part of Mrs Jackson’s estate was made up of money inherited from the appellant’s father on his death, and gave little weight to the fact that Mrs Jackson had been (in the finding of the judge at first instance) “unreasonable, capricious and harsh”. According to Arden LJ, the wishes of the deceased, although obviously relevant, are limited by the discretion Parliament chose to give to the court when introducing the 1975 Act.

The interest of all this for Scotland is that the Government is currently consulting on whether to remove the protection from disinheritance that children in Scotland have enjoyed since the 1300s. As I explained in more detail in another post, children’s current non-discretionary entitlement to one third of their deceased parent’s moveable estate could be replaced, either by a non-discretionary “legal share” of 25% of what they would have received on intestacy, or by an entirely discretionary award available only to dependent children under 18 (or under 25 in full-time education or training.)

I recently had a discussion with my Glasgow colleagues @dotreid, @culbokster, @jilljrobbie and @stephen_bogle about responses to the consultation paper. We asked a lot of the same questions that the media have been asking in relation to the Ilott decision. When should children be protected (or not)? Why? What about the wishes of the deceased? What does this mean for our understanding of “family”? What about intergenerational social justice? (I haven’t seen the media ask that last question yet, to be fair.)

The consensus in our discussion was that there are substantial policy issues surrounding reform of the law of succession that have not been addressed or even acknowledged in the consultation paper. Family law policy in Scotland and the UK recently tends towards the idea that law should facilitate the choice to enter or leave intimate adult relationships, but the parent/child bond is for life. Current low wages and high housing costs mean even fully employed adult children will struggle to save the deposit required to buy a house – does intergenerational fairness require that parents who have benefitted share the wealth of the house price bubble? If adult children can always inherit, should they also take responsibility for the care of elderly parents, perhaps relieving some of the financial burden on the state? Should our succession reforms aim towards social justice more broadly in the same way as our land reform policy arguably does, making it more difficult for wealth to be concentrated in the hands of a small number of families? Should our succession policy be more actively pro-business, taking care to ensure that, whatever the rules, family businesses should not have to be dismembered to ensure satisfaction of inheritance claims?

Whatever view you take on questions like these, it’s hard to avoid the fact that succession policy is an acutely political issue. And yet, avoid it the consultation paper does. The reforms are cast as essentially technical, aiming to simplify the law and make it “fair”, that most nebulous of concepts. It seems unlikely that Mrs Jackson would find the Court of Appeal’s decision fair, but in Scotland, Mrs Ilott’s entitlement would have been automatic.

I think my response to the consultation paper is likely to include a preamble raising this broader policy point: what are we even trying to do here? An answer to that question might help us decide whether Mrs Ilott was deserving, or Mrs Jackson (and the RSPB etc) disrespected.

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