On 15 March 2017 the Supreme Court gave its Judgment on the appeal by three national charities against an earlier Court of Appeal decision. Mrs Jackson had made no provision in her Will for her estranged daughter and had left all of her money amounting to about £500,000 to the three charities. Her daughter made a claim against her deceased mother's Estate.
The decision to overturn the Court of Appeal Ruling and to revert back to the original County Court decision left charities feeling very relieved. It is estimated that about £2 billion a year is left to charities by gifts and legacies within Wills although the number of charities that benefit from this is only about 7% of the total number of charities in this country. Charitable giving by way of Wills is a huge source of income for charities and that was one of the key reasons why the charities appealed the decision as they were concerned that it would set a precedent with the effect that people would be reluctant to leave gifts in their Will or in fact the charities would not receive monies that was intended to be left to them under a Will. But the Supreme Court did not cancel the claim of Mrs Jackson's daughter completely. The Supreme Court reverted back to the original County Court decision which allowed the claim to be made and the daughter to receive £50,000. It was not therefore a complete victory – or was it?
The claim made by Mrs Jackson's daughter was under the Inheritance (Provision for Family and Dependents) Act 1975. This legislation remains in force and there is a risk it could be used. It is unusual for adult children to succeed in making a claim and that was one of the aspects of this case that made it more unusual and worthy of headlines. Another was an examination of the principle of whether someone can "disinherit" a close member of the family and decide what they do with their money or should there be an "expectation" by family to be benefited even if that meant that money is not given to who it was intended to go to – possibly a charity. Whilst Mrs Jackson's daughter thought her mother was being unfair in not leaving her money to the daughter was she entitled to expect that she should receive her mother's money on her death especially after they had not spoken for many years?
The unspoken question that Melita Jackson's case also raised was is there a point in making a Will at all if one can be so easily disregarded. Solicitors for many years have worked by a protocol to try to limit the risk of claims being made and until the Supreme Court decision the risk was that that was going to be thrown out. If it had been what would have replaced it? Although no guidance was given by the Supreme Court on that the current checks and balances that are used at the moment are going to be even more important. So what are the lessons to be learnt for the future :-
- Making a Will is the starting point. Almost half the population do not have Wills so any question of Inheritance Tax planning or charitable giving does not arise if there is no Will. The rules concerning intestacy (where someone dies without a Will) are rigid and do not provide for someone to make provision for a charity.
- Extreme care and thought needs to be given to situations where someone making a Will excludes a close relative such as a spouse or child. There may be very good reasons for doing this but a separate letter explaining them is essential. The wording and drafting of this is important because the time that a Will and accompanying letter will be examined by a Court would only be after the person making the Will has died and then it would be too late to make any other provision or change the letter.
- If Mrs Jackson had made some provision in her Will for her daughter it is likely that this whole sorry saga and the expensive litigation would have been avoided. What is an appropriate amount or provision does depend on the particular circumstances but again care needs to be given to this and careful advice needs to be sought from a solicitor. It may be that no provision is ultimately made in a Will for a relative but the possible repercussions with a future claim being made need to be fully considered.
- Charities will be relieved that an important potential source of income has not been put further in jeopardy by this case. There is still the risk of an Inheritance (Provision for Family and Dependents) Act 1975 claim being made but the principle has been reasserted by the Jackson case that the starting point remains that someone is entitled to leave their money under their Will to whoever they want to or to a charity.
- Comments were made in the Court of Appeal regarding the connection between the person making the Will and the charity. It was commented upon that in Mrs Jackson's case she had no connection with the national charities she wanted to benefit. A factor in future claims could be therefore the degree of connection there is between someone making the Will and the charity they wish to benefit. If it is a local charity what is the reason for the gift? Has the person experience of the work of the particular charity whether it be a local or a national one? All of these factors need to be considered and it may be appropriate to show that in some way. This needs to be thought of at the time a Will is made.
- Overall whilst the starting point is actually making a Will it is essential that the surrounding circumstances are taken into account and safeguarding action is taken to try to ensure that claims are unlikely to succeed in the future. Making a Will on its own may not be sufficient. To save costs there has been a recent trend for people to make their own Wills or to ask a non-solicitor Will writer to prepare the Will. Cheapest is not always the best and trying to cut the cost can be a false economy. If the necessary additional advice and work is not carried out then the risk of a claim could be increased with the long term effect that the provision intended by a Will is not carried out.
- One of the most sobering conclusions from the case is how much money can be spent in litigation and the time litigation takes as Mrs Jackson died over 12 years ago. In many cases the legal costs involved are met from the Estate reducing substantially the monies available to be divided. The risk of litigation can be avoided or substantially reduced with the right legal advice at the right time.
The job of a solicitor in preparing a Will goes beyond just the drafting of that document. It extends to advising a client as to potential future claims and how to avoid them or limit the risk of a claim being made. The role of a solicitor is important as well in discussing with someone making a Will the possibility of a legacy to a charity and how best to secure that. Charities working with solicitors over schemes for the preparation of Wills also need to be sure that the best advice and preparation has been carried out to try to avoid the risk of a future claim being made and essential income for the charity being lost. Solicitors working with not just clients but also charities has therefore never been more important especially now in the light of the landmark decision in the case of Melita Jackson.
We pride ourselves on providing Wills that give you complete peace of mind and legal assurance that your wishes will be carried out once you are gone, if you have any concerns about making your Will please contact the Wills, Trusts and Probate team today on 01603 693500 or email us using the 'Make an enquiry' form.
We also offer a full range of legal services to our clients from the Charity sector, please see our dedicated webpage on our legal services for Charities for more information.