The Law Commission has just completed its review of the law relating to intestacy and family provision and presented two draft bills dealing with these areas of law to the government.
The Law Commission said: “If this Report has one over-arching message to the public, it is this: make a will and keep it under review.”
The intestacy rules are the rules which state who is entitled to the estate of someone who has died without leaving a will. Family provision is that part of the law (The Inheritance (Provision for Family and Dependants) Act 1975) which allows certain people to claim a share or greater share of the estate of someone who has died. Such claims may be brought where a will or the intestacy rules fails to make reasonable provision for someone.
The Law Commission have in particular looked at the position of cohabiting unmarried partners under the intestacy rules and the family provision rules and the position of surviving spouses under the intestacy rules
The aim of the intestacy rules is to provide certainty about the distribution of an estate in a manner which is generally acceptable and which works satisfactorily in most families. The law of family provision supplements this by providing a way of challenging the rules where they have not worked satisfactorily.
The Law Commission have recommended some substantial changes to the intestacy rules and to the family provision rules.
The current intestacy rules are complex and the following is a simplified explanation of them. If someone dies leaving a spouse and children the spouse and children share the estate. The spouse receives £250,000 and the deceased’s personal belongings. Anything over and above £250,000 is divided in half with one half held on trust for the spouse for their life and after their death it passes to the children. The other half passes to the children straight away.
If the deceased is survived by a spouse but no children the spouse receives the deceased’s personal belongings and £450,000 and half of anything over and above £450,000. The other half goes to the deceased’s parents or, if they have died, the deceased’s siblings. The spouse only takes the whole estate if the deceased left no surviving parents or siblings.
A cohabitant of the deceased is not entitled to anything under the intestacy rules, although they may be able to bring a claim for family provision under the 1975 Act.
The Law Commission’s recommendations on the intestacy rules are:
- Where the deceased left a spouse and no children the spouse should take the whole estate
- Where the deceased left a spouse and children the trust should be dispensed with. In that case the spouse would receive £250,000 and half of anything over and above £250,000 and the children would receive the other half.
- That the fixed amount passing to the spouse be reviewed regularly
- That a person who lived in the same household as the deceased as the deceased’s spouse up until the date of death should have the same rights under the intestacy rules as a spouse, provided that the deceased was not married or in a civil partnership at the date of death. The cohabitation must have lasted for five years. If the deceased and the cohabitant had a child together who was living in the same household at the date of death the period of cohabitation would be two years instead of five.
People who can bring a family provision claim are restricted by the 1975 Act to: spouses and former spouses, cohabitants (who lived with the deceased for a continuous period of two years ending with the death), children of the deceased, those whom the deceased treated as children of his family in relation to a marriage or civil partnership and any other person whom the deceased has maintained financially. Furthermore a claim may only be brought if the deceased was domiciled in England and Wales at the date of their death. It is possible to not be domiciled in England and Wales even after living here for many years and even if the deceased had investments and family based here.
The Law Commission recommendations include:
- A family provision claim should be allowed where: - The deceased was domiciled here; - The deceased owned land here - The deceased was not domiciled here but nevertheless English law would apply to the succession to some of his assets.
- A cohabitant of the deceased who had a child with the deceased be allowed to bring a family provision claim even if the period of cohabitation was less than two years. The cohabitant would have to be living with the deceased as the deceased’s spouse at the date of death and the child would have to be living in the same household at the date of death.
- The definition of “child of the family” of the deceased should no longer be limited to situations where the deceased was married or in a civil partnership.
The Law Commission also recommend other technical changes which would help those bringing a claim. It remains to be seen whether the draft bills will be enacted. It generally takes a number of years before a Law Commission bill becomes an act of parliament.
If you would like further information please contact Emma Satterly on firstname.lastname@example.org or 01223 461155.