The Court of Appeal’s recent ruling, which resulted in three charities receiving £336k instead of £500k from Melita Jackson’s estate, has sparked concerns that future bequests made to the charity community may be threatened.
Michele Todd, a partner and wills specialist at hlw Keeble Hawson, explains why charities should not panic following the court’s decision to award £164k of Mrs Jackson’s estate to her disinherited daughter, Heather Llott, against Mrs Jackson’s express wishes.
The case is not the ‘landmark ruling’ the media has made it out to be – it is the individual circumstances of this case which are unique.
Any adult children can make a claim on a person’s estate under the long-standing Inheritance (Provision for Family and Dependents) Act 1975. What the court takes into account is the child’s financial circumstances – with self-supporting adult offspring likely to be awarded significantly less than those in their early 20s and still in full time education.
In this case Mrs Jackson, the Testator, had no real allegiance to the RSPCA, RSPB and Blue Cross animal charities benefitting under the will. She had not been a lifetime supporter and it appeared that leaving the estate to them was simply a way to thwart her daughter.
In addition, Heather Llott had five children and was heavily dependent on state benefits – factors which, in my opinion, swung the decision. If Heather Llott had been better off - and if Melita Jackson had had an established a connection with the charities - the outcome could have been completely different.
Testators who forge good relationships with charities are far less likely to have their bequests, known as ‘testamentary gifts’, challenged in court. In cases where the bequest is not from a known supporter, charities would be advised to speak to the executors and/or solicitors acting for the estate to try and establish the deceased’s family relationships - and whether any challenge is likely.
Ultimately charities have a responsibility to maximise all awards - and, if they enter into negotiations to give up assets in order to settle with a disgruntled family member, they could technically be in breach of their obligations. Equally it could be argued that by negotiating they will save more for the charity compared to the litigation costs incurred of defending any claim.
I would advise taking a pragmatic approach on a case by case basis as to whether negotiations are likely to save more in costs than might be given away – something which is particularly relevant for charities where resources are limited.
For more information on this, or any charity related legal issue, please email firstname.lastname@example.org or telephone 0114 2906207.
Michele Todd is a member of the Weston Park Hospital Cancer Charity management committee, Deputy Chair of the Charity's Trustee Board and its Legal Trustee.