The Court of Appeal decision in the claim over Mrs Jackson's estate by her daughter continues to cause concerns for charities – and lawyers alike! This is the case where in July 2015 the Court of Appeal awarded the daughter of Mrs Jackson a third of her estate even though Mrs Jackson had made it clear in her Will that she wanted all of her estate on her death to go to three charities – RSPCA, RSPB and Blue Cross. The charities have appealed against that decision but it may be at least another year before the Supreme Court gives the final and ultimate decision on this. In the meantime charities (and private client lawyers) are asking where they stand and whether leaving legacy provision in Wills is going to be effective in the future.
The starting point remains that anyone can make provision in their Will for charities to receive a legacy on their death. However under the Inheritance (Provision for Family and Dependants) Act 1975 the Court has the power to consider claims by particular groups of people if they do not consider that the provision in a Will is sufficient to give reasonable financial provision for them. Mrs Jackson's daughter was therefore entitled to make a claim against the estate and she did so on the basis that her needs outweighed allowing Mrs Jackson to decide who her estate was given to on her death. The Court of Appeal also made it clear that it did not take into account any "entitlement" that the charities might have as they had no expectation to receive any money despite being the intended beneficiaries that Mrs Jackson wanted to give her money to.
Mrs Jackson and her Solicitors when she made the Will in 2002 were apparently aware of the possibility of a claim being made. As a result Mrs Jackson also left with her Will a letter explaining why she had not made any provision for her daughter. She referred to the fact that her daughter had walked out of her home in 1978 to live with her boyfriend whom she subsequently married. Two years later Mrs Jackson died and for the following eleven years there has been a dispute over her estate with the Court of Appeal giving her approximately a third share by taking that away from what was intended to go to the three charities. The Court of Appeal clearly had it in mind that they thought that Mrs Jackson had been unfair on her daughter given that she has five children and wanted money from her mother's estate to help her buy her Housing Association property where she was living with her husband and children. The Court of Appeal even went so far as to structure a settlement in a way that she would not lose her State Benefits so clearly she got a great deal of sympathy from the Court of Appeal.
The Jackson case has scared many charities and does set a significant precedent although how general and fundamental that is going to be remains to be seen and clarification from the Supreme Court will help this. The case had some significant aspects which are not always common. The first is that Mrs Jackson made no provision whatsoever in her Will for her daughter whereas if she had made some relatively small provision the ensuing litigation may never have happened. It is always good practice to add provision where a potential claim under the Inheritance Act is a possibility, e.g. where someone is "disinheriting" their children. At the time of making her Will it was possibly foreseeable that this litigation might result and in addition to making a Will if Mrs Jackson had not just left the letter explaining her reason but had also made some relatively small provision for her daughter the Supreme Court might not now be looking to disentangle this and set clear guidance for the future.
Another significant aspect is that Mrs Jackson made provision for national charities which she apparently had no connection with. This was a factor referred to by the Court of Appeal and it is possible that if she had made provision for local charities that she had a connection with the Court of Appeal's view may have been different. If Mrs Jackson had shown that she had a connection with those national charities or a love of animals this might have added weight to her desire to leave all of her estate to those charities.
So although the "jury is out" on the precedent to be set by this case even if the Supreme Court supports the Court of Appeal decision it does not mean that provision in Wills leaving legacies to charities are going to be overturned. In the vast majority of situations a legacy to a charity will be part of the division of an estate with other monies being divided between family rather than the stark situation of Mrs Jackson wanting to make no provision at all for her daughter. However if the Supreme Court does back up the Court of Appeal decision it takes claims under the Inheritance (Provision for Family and Dependants) Act 1975 to a level that Solicitors had not thought would be possible. Usually such litigation and claims relate to minor children rather than to an adult and the guidance of the Supreme Court is going to be important in setting out the nature of the claims and what is likely to succeed in the future. For national charities legacies that are given in Wills remain a vital part of their income. For example the RSPCA's overall income is about £135 million per annum and half of that is from legacies, i.e. money left to them in Wills. The three national charities involved in the Jackson case cannot just ignore the potentially devastating effect of the Court of Appeal decision which is why they have appealed to the Supreme Court. Whatever the decision of the Supreme Court it is clear that in the future much greater thought will have to be put into the making of Wills where legacies are given to charities although that is still likely to be a very big source of income for charities even after the Supreme Court decision.
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