Modernising inheritance law – Law Commission consultation on intestacy

 In Wills

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Modernising inheritance law

The Law Commission is currently undertaking a consultation reviewing the law of intestacy and family provision claims on death. David de Menezes, Marketing Communications Manager at Title Research, looks at the scope of the consultation and how the Commission is seeking to bring inheritance law up to date.

The majority of estates are touched by intestacy. Even where the deceased has left a valid Will, its terms can be challenged via the Inheritance (Provision for Family and Dependants) Act 1975 if reasonable provision has not been made for certain family members and dependants.

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The Law Commission is currently undertaking a consultation regarding a review both of the intestacy rules (which, broadly speaking, have been untouched since 1925) and claims under the 1975 Act.

Although we have very generous intestacy provisions (kin as remote as the surviving issue of half-blood uncles and aunts can take), in the very rare cases where an intestate has died without leaving any entitled next of kin at all, the estate will devolve to the Crown or the Duchies of Cornwall or Lancaster as bona vacantia.

Whereas the intestacy provisions set out a clear framework for administering the estate of those who die without having left a Will or, where they have left a Will, where it does not deal with all of their assets, the rules in themselves are not flexible; rather they impose a “one size fits all” regime on the assets in the estate and the entitled next of kin. People on intestacy are either entitled as of right, or not at all. However, on a successful application under the 1975 Act, the Court can order a distribution other than per the terms of the Will or intestacy provisions. One of the aims of the Commission’s review is to enable a more equitable distribution of an intestate’s estate without the need to launch an action under the 1975 Act.

The rigidity of the intestacy rules leaves little room for discretionary distribution by PRs to deserving friends (e.g. carers) of the deceased, or to kin too distantly related to take as of right. But is this inflexible approach appropriate in the modern world, where family structures are so much more fluid than when the rules were drafted? By contrast, the Treasury Solicitor has discretion to make ex gratia payments from bona vacantia estates administered in favour of the Crown where necessary or desirable.

The effect of the intestacy provisions as they are at present can be to make a deserving spouse, or cohabitant, and family, homeless, albeit in a small number of cases Consider: a typical asset-rich but cash-poor couple (whether married, in a civil partnership or cohabiting), with two or three children. The effect of the statutory legacy might be to force the sale of the family home in order to pay out adult children. Litigation might have to be entered, with lawyers appointed to act in the children’s interest defending the action brought by the surviving parent in order to keep a roof over the family’s heads. Needless to say, the present intestacy rules on their own would not help a surviving cohabitant, notwithstanding his or her parenthood of the deceased’s children.

The Law Commission recognises that the family home might have to be sold for other reasons – for example the deceased’s indebtedness – and perhaps the family unfortunately made homeless as a result, but is concerned to avoid this outcome simply as a result of the deceased’s intestacy.

The Law Commission’s proposals look at reforming a cohabitants’ position and consider whether a cohabitant should have an entitlement if there is no surviving spouse and, more especially, where cohabitants have been living together for more than five years or have children together, whether the survivor should have the same rights as a surviving spouse does at present. The commission also proposes that, where a couple has cohabited for between two and five years, the estate should be shared between the cohabitant and other family members. The two year period has been adopted in other areas, e.g. in Fatal Accident Act cases.

One objection to reforming the position of cohabitants in this way has been the perceived problem of demonstrating cohabitation for the required period. However, there has been no difficulty with this in overseas jurisdictions.

The Commission also suggests that the distinction between whole- and half-blood kin could be dropped so that siblings with whom the deceased shared either parent would be entitled equally with those with whom he or she shared both. In addition, were the deceased’s child has been adopted out, the Commission queries whether the adoptive parents should replace the birth parents on all intestacies, for example in cases where the premature death of one parent leads to the re-marriage of the widowed parent and the adoption of the child by the surviving parent and step-parent.

The Law Commission has gone to considerable lengths to publicise its consultation paper and has prepared an overview document as well as an executive summary. It has also commissioned The National Centre for Social Research to carry out focus group research and has made its findings public at www.lawcom.gov.uk/docs/NCSR_research_report.pdf.

NOTE:  The consultation period closed on 28th February 2010.

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