Inheritance Tax  

Supreme Court ruling makes it difficult to challenge wills

“The court also acknowledged the significance of Mrs Jackson’s choice of charities, even though she had no connection with them during her lifetime.  

“For those who desire to make a charitable gift on death, this aspect of the judgment support their freedom to choice regardless of any previous involvement with those causes.”

What to do for your clients

Rachael Griffin, tax and financial planning expert at Old Mutual Wealth, said the decision shows the limit of the Inheritance (Provision for Family and Dependants) Act 1975 and - reduces the likelihood of more cases of grown-up children challenging inheritance and wills. 

Ms Griffin said: “Some other countries such as France have the concept of ‘forced heirship’ where certain heirs receive priority or specified shares.  

“One of the cornerstones of English law is the principle of testamentary freedom – the Supreme Court’s judgement reinforces the importance of this.

“However, this case has highlighted that wills can be contested and the decisions are not set in stone. 

“People should consider lifetime planning using trusts, which have both tax benefits and offer the opportunity to gain greater control over the distribution of wealth on death. 

“A scenario such as the Ilott case is also unlikely to occur as the 1975 Act does not apply to lifetime planning. 

“Plus, distribution of trust assets against the terms of a trust would be a breach and could be legally challenged. A bonus is trusts are currently confidential, so unlike wills they do not become public knowledge. 

“The distribution of wealth upon death has become more complicated in recent years. It is important to carefully plan for how you wish your money to be divided upon your death and seeking financial advice is the best place to start.”

Need for action

Amy Proferes, barrister from Serle Court, said Lady Hale’s short judgment was a call for action by Parliament in the field of inheritance disputes.  

She said: “The 1975 Act raises complex social questions about family obligations and ‘family wealth’ that are not answered by the legislation itself.  

“The law is currently quite unpredictable and this judgment only confirms that those thinking about bringing a claim should think carefully about the risks involved.  

“Settling such claims on agreeable terms might prove a more secure option.”