When Charity Does Not Begin at Home and Testamentary Freedom Triumphs

When Charity Does Not Begin at Home and Testamentary Freedom Triumphs

The truism that charity begins at home might have been given a serious knock back going by the recent UK Supreme Court decision concerning an adult daughter's claim against her mother's estate in IIott v Mitson [2017] UKSC 17.

The daughter was rejected by her mother at 17.  She was her only child.  A lifelong estrangement between the two followed, lasting 26 years until mother's death at age 70.  Her mother completely cut the daughter out of the will, an act described by the District Judge as harsh and unreasonable, and left all of the almost £500,000.00 estate to three animal charities.  It was accepted that the daughter was in straightened financial circumstances.  She and her family (husband and four children) possessed old and warn out household furniture, equipment and a car which kept breaking down, lived in a house rented from a Housing Association and survived on an income supplemented by various benefits of around £20,000.00 per annum.  Despite those circumstances at the end of the day all she received from the Court was £50,000.00.  The rest of the estate went to the charities with which the deceased had had no particular connection during her lifetime.

The law in both England and New Zealand recognises the individual's freedom to dispose of their assets by will in whatever manner they wish.  In both jurisdictions, aside from the default succession rules in the event of an intestacy, there are no rules of automatic succession or forced heirship.  However both have their own particular statute which gives the Court ability to interfere with a will in favour of a limited class of persons.  In England generally speaking if the will provision has failed to make reasonable financial provision for a spouse the Court can make such financial provision for the spouse as would be reasonable in all the circumstances for that person to receive, and in the case of a child claimant only to the extent of what is reasonable for the applicant child to receive for his or her maintenance.  Certainly in the case of a child claimant this is narrower compared to the applicable statute in New Zealand which gives the broader basis to interfere with the will of when adequate provision is not available from the estate for the proper maintenance and support of the claimant.  Which means not only the economic need of the claimant is taken into account but broader intangible family considerations are also taken into account when assessing how much is necessary and proper to be awarded to the claimant to fulfil the moral duty of the testator.

There can be no doubt that under New Zealand law the daughter in the English case would have succeeded to a much greater award. That will be because of the difference in the wording of each country's statute allowing for interference by the Court.  However the concept of testamentary freedom is present in both jurisdictions so will this dramatic English example of it going hard against a poor claimant now be used against claimants in New Zealand?  Only time will tell. Each case of course will very much depend on its own circumstances.

However it is submitted that in the right case there is still scope at least in New Zealand for the truism that charity begins at home.  There have been a number of such cases in New Zealand in relation to charities, particularly in modest estates, where the outcome can be summarised by saying "charity begins at home", and indeed in at least one the Judge positively expressed agreement with the proverb.

If you have any concerns or questions on any aspect of how someone has left his or her estate to be divided or the state of someone's testamentary writings, please contact Peter Fuscic at our Auckland Office on (09) 306 6746 (pfuscic@mcveaghfleming.co.nz).

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