Intestacy and Family Provision Claims on Death

Ref: 02.10

The Law Commission has published the above Consultation Paper setting out proposals to amend the law relating to instestacy and familiy provision claims on death.

The Consultation Paper stems from a Government Consultation in 2005 whichconcluded that a wide ranging review of intestacy and family provision wasneeded in both England and Wales and in Scotland.

The key proposals concern an increase in the statutory legacy for a surviving spouse and automatic entitlement for co-habitants in certain circumstances.

The law regarding intestate succession dates back to 1925 and the rules allowing certain individuals to claim provision on death date back to 1975 (under the Inheritance (Provision for Family and Dependants) Act 1975).

The Law Commission´s view is that the inheritance law needs tobe brought up to date to meet the needs and expectations of modern families.

Despite the fact that under English law individuals are free to leave their estate as they wish under their will: there are no forced heirship rules such as those which apply in certain European countries, as well as in Scotland. Every year tens of thousands of people die without a will.

Key Intestacy Proposals are as follows:

• It is provisionally proposed that where a person dies intestate survived by a spouse but no descendants, the whole estate should pass to the spouse, whether or not there are other family members living. This would mean that the surviving spouse would no longer have to share the estate with parents or brothers and sisters of the deceased.

• Where there are also surviving children or other descendants, the Commission recognises that the position is more complex. However, given the current limits (ie the surviving spouse being entitled to everything up to maximum of £250,000 with the amount over this figure divided and shared with the children) in practice apparently at least 9 out of 10 surviving spouses inherit the whole of the estate and it is only in the wealthiest 10% of estates that children are likely to inherit anything. In view of this, one reform option that is suggested is to give the surviving spouse the whole estate in every case. However, when similar reform was recommended in 1989, it was not implemented because of Technical concerns that some children would be disinherited, particularly where a parent had remarried.

Co-habitants

The next set of proposals concerns co-habitants. At the moment, where a couple live together without getting married or forming a civil partnership and one of them dies, the survivor has no automatic right under the current intestacy rules to inherit any part of the deceased’s estate. This is the case no matter how long they have lived together and even if they had children together. In some circumstances a surviving co-habitant can go to court to challenge distribution of a deceased partner’s estate under the family provision legislation.

The Commission recognises that having to go to court will often be emotionally and financially draining. They therefore propose to reform the intestacy rules so that in some circumstances a surviving co-habitant can share in a partner´s estate without having to go to court. The Commission poses the questions which co-habitants should qualify for inclusion under the proposed rules and what they should receive. The provisional proposal is that couples who have had a chid together, or have lived continuously as a couple for more than five years, should have the same rights on intestacy as spouses.

The next proposal considers childless relationships of less than five years. The provisional proposal is that where a couple have lived together for more than two but less than five years, the survivor should be entitled to half of the share of the estate that the surviving spouse would have received. Other areas highlighted for potential reform include the following:

• trusts for children on intestacy and the effect of adoption on the child´s Entitlement;
• family provision claims by adult children; and
• the distinction made in the intestacy rules between full brothers and sisters and half brothers and sisters;

The Consultation Paper can be accessed on the following Law Commission link.

The Consultaion closes on 18^th February 2010.