Will your park end up in the right hands? article banner image

Many owners may wish to pass their park to a certain individual upon their death. Whether you run your business as a limited company, a formal partnership or more informally, you need to consider what would happen to your business if you or another owner died. Would it end up in the right hands? This article explains a recent case.

The fundamental principle in England and Wales has always been a person is free to leave their estate to whomever they wish by making a Will. A ruling by the Court of Appeal looks to have called this fundamental principle into question. The long running case saw the Court decree that Heather Ilott, whose mother had explicitly ruled her out of her Will and instead left her £486,000 estate to three charities was in fact entitled to a third of it.

So what implication could this have for you?  You may make a Will passing your business to a certain individual. Regardless of this provision your children (or anyone who falls within a certain category) could make a claim under the Inheritance (Provision for Family and Dependants) Act 1975. A claim under this act is for an order from the Court that the claimant  should receive a share of your estate even if they have been specifically ruled out of your Will. If they did this the person who you wished to inherit your business may not receive it.

Mrs Ilott become estranged from her mother when, aged 17, she married her childhood sweetheart. She was largely dependant on state benefits, had five children and lived in a housing association property with her husband. She did not consider that she had been properly provided for in her mother’s will and so began the process of contesting it. In 2007 Mrs Ilott was offered the sum of £50,000 but fought on for a larger share of money culminating in her receiving the sum of £164,000. The award by the Court was to enable Mrs Ilott to buy her home from the housing association while the remainder of the estate will still pass to the charities.

This ruling appears to be a warning shot for anyone planning to exclude their children, spouse or other dependants from the provision they are to receive in their Will or under the rules of intestacy. That is because certain individuals can make a claim for “reasonable financial provision” from an estate regardless of whether there is a Will or not. In this case even though Mrs Ilott’s mother had left two letters along with her Will stating why she did not want her daughter to receive anything, the Court has ultimately decided that she as a claimant has not been reasonably provided for by her mother’s estate and has sought to make a substantial award to her.

This decision is important because the claim made by Mrs Ilott used a piece of legislation to assist those who are dependant upon the deceased but had not received reasonable financial provision from their estate. In this case Mrs Ilott wasn’t financially dependant on her mother nor even had a relationship with her for a period of 20 years.

You may be thinking but it is my property, my business and surely I can do with it what I want. If not, what’s the point in making a Will. If you feel like this, I can sympathise with your position but the fact is, for your estate to pass to those you intend you must make a Will and it must be carefully prepared if your estate is to stand any chance of defeating these types of claim.