Exclusion Clauses

30 June 2016

Exclusion Clauses

When making a Will, there are provisions you can take to exclude any persons from your Estate should you wish to; this is called the Exclusion Clause. Despite this, you should be aware that if you wish to exclude someone from your Will, that such a person may make a claim against your Estate at a future date, resulting in the beneficiaries of the Will receiving less than was originally intended and written in your Will.

The type of persons who can contest a Will is not just limited to relatives or close blood relatives, but can also include a variety of other dependants. Because of this, it is important that it is made clear your reasoning for excluding a specific person or persons, in order to provide additional support against the exclusion, should it be contested. This can be done through created a properly drafted Letter of Wishes, which should be kept safe with the Will so that it is accessible to the Executors of the Will, if required. However having a properly executed Will and storing a Letter of Wishes outlining the reasoning behind exclusion, still does not prevent a claim from being made. In the recent case of Illott v Mitson, a successful claim has been made against the estate despite the testator’s intention that her daughter was to receive no benefit from her estate.

Illot v Mitson – The case concerned the estate of the late Melita Jackson who passed away in 2004 and her estranged daughter Heather whom she did not wish to receive any benefit from her Estate despite being her only child. Heather had not been in contact with her mother since the age of 17, when she had left home and the mother and daughter had no contact what so ever for a period of 26 years. The mother’s Will had left the majority of her estate to three animal charities and had excluded her daughter from her Will - it was clearly the mother’s intention that the daughter was to receive nothing from her estate.

Despite this the daughter made a claim against the mother’s Will and Estate under the Inheritance (Provision for Family and Dependants) Act 1975 for reasonable financial provision. The daughter had initially made a claim in 2007 and was awarded £50,000 but had appealed, as had the three charities. In the first appeal the daughter received nothing. The judgement in 2011 enabled the Court of Appeal to widen case law in terms of an adult child’s ability to claim against the Estate of their deceased parent.

The matter went through a further two appeals, and recently the Court of Appeal released a decision on 27 July 2015. The Court of Appeal held that the original Judge’s decision was wrong as they had failed to consider the effect that award would have upon the daughter who was in receipt of benefits. It considered what alternative award should have been made to the daughter and decided that the daughter should receive approximately a third of the mother’s total estate to enable her to purchase her housing association property. The daughter had five children of her own and was living on limited means on state benefits with no pension.

In reaching the decision, the Court of Appeal considered numerous factors such as the size of the Estate, the obligations and responsibilities the parent had to the child and the other beneficiaries competing needs and available resources. The charities are expected to appeal the latest decision and this may lead to further changes in this complex case.

So, is it likely that this decision will increase the types of claims being made by adult children?

Whilst this case has received a lot of media coverage, this may well be misreported to have led to an increase in an adult’s child ability to make a claim under the Act. An adult child has always been in the category of applicants under the Act and this has remained unchanged; numerous other dependants under the Act may also seek to make a claim. However due to the daughters success, it may encourage some individuals who were considering making a claim against their parent’s estate in bringing forth a claim. The choice of beneficiaries may also affect the likelihood of further appeals at a future date, especially if it is a charity with available funding to appeal such decisions. It may be that more cases of this nature do not reach the courts but are subject to mediation and settlement offers.

In order to protect your Will against claims made by those you wish to exclude from your estate, it is important to ensure the necessary documentation has been properly drafted. Get in touch with a member of our team today to discuss Exclusion Clauses and making a Will to see how Redstone Wills can help you.

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