The Law Commission for England and Wales has recommended some widening of the circumstances in which family members and certain other individuals can bring a claim for financial provision against the estate of a deceased person. The recommendations are contained in the Law Commission report entitled "Intestacy and Family Provision Claims on Death" published on 14 December 2011.
First, whereas at present family members may bring a claim only if the deceased was domiciled in England and Wales, the Law Commission recommends that this should be extended to permit claims against the estates of non-domiciliaries where all or part of the deceased's estate is governed by the law of England and Wales. This would normally be the case, for example, if the deceased left land in England and Wales or made a will governed by English law which is recognised by the law of the state where the deceased died domiciled.
Secondly, whereas at present a claim can be made by (or on behalf of) a person who has been treated as a "child of the family" by a married couple or a couple in civil partnership, the Law Commission recommends that this be extended to include a person treated as a "child of the family" even where the couple in question are unmarried or are not civil partners.
Thirdly, the courts have held that a person claiming as a dependant of the deceased can only succeed if he/she shows that the deceased had assumed responsibility for the maintenance and also that he/she contributed more to the relationship, in terms of financial value, than did the applicant. The Law Commission report recommends that whilst these factors should be taken into account, they should no longer be regarded as absolute hurdles to a family provision claim.
The report contains other recommendations about what should happen on intestacy, that is, when a person fails to make a will. However, this briefing only deals with the recommendations relating to family provision claims.
Inheritance (Provision for Family and Dependants) Act 1975 ("the Act")
Certain family members of a deceased person may go to court to challenge the provisions of the deceased's will on the basis that it fails to make reasonable financial provision for the claimant. If the deceased had failed to make a will, or if any will failed to deal with the whole of his/her estate, so that the deceased died wholly or partly intestate, then family members may challenge the division of the estate under the intestacy rules, again on the basis that it fails to make reasonable financial provision.
Who can make a claim under the Act in its present form?
The categories of individuals who may make a claim are
- the deceased's spouse or civil partner at the time of his/her death (or the deceased's former spouse or civil partner provided they have not remarried/entered a new civil partnership)
- a child of the deceased
- any person (not being a child of the deceased) who in the case of any marriage or civil partnership to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage or civil partnership.
- any person who immediately before the death of the deceased was being wholly or partly maintained by the deceased ("dependants")
- a person who was living in the same household as the deceased and as his/her spouse or civil partner for at least two years immediately preceding the deceased's death
Widening the Act to include the estates of non-domiciliaries
At present such a claim can only be made in relation to the estate of a deceased person who died domiciled in England and Wales. In English law domicile is a complex concept which can be roughly interpreted as being equivalent to the state or country of a person's permanent home, even if the person des not currently live there. In many cases the location of a person's permanent home will be obvious. However, if a person's circumstances are unusual or complex, it can become very difficult to determine their domicile. For these reasons the issue of the deceased's domicile in family provision claims can become a significant preliminary issue in litigation. In some cases the requirement to show that the deceased was domiciled in England and Wales prevents family members from being able to access the family provision jurisdiction, even if the administration of some or all of the deceased's estate is otherwise governed by the law of England and Wales.
The effect of removing the requirement to show that the deceased had been domiciled in England and Wales at death would mean that the estates of non-domiciled individuals would be potentially within the family provision jurisdiction of the English courts. This would only be the case, however, where some or all of the deceased's estate is governed by the law of England and Wales. Even if the deceased was domiciled outside the UK, English law will apply to any of the deceased's land situated in England and Wales and to any other of the deceased's assets the succession of which is recognised by the law of the deceased's domicile as being governed by English law. Furthermore, in cases where the deceased was probably domiciled in England and Wales but this would be difficult to establish, it would be easier in future, if the proposed reforms are enacted, for family provision applicants to make a claim in cases where some or all of the estate's succession is governed by English law.
The Law Commission does not propose expressly to limit claims to property within the jurisdiction of the courts of England and Wales. This is on the basis that the courts would not in any event make an order which would be ineffective because unrecognised in the state in which the property was situated.
Widening the meaning of "child of the family"
A person who was treated by the deceased as a child of his or her family is permitted to claim family provision, but only if the claimant was treated as a child of the family in the context of a marriage or civil partnership. However, the Law Commission has taken the view that it is the quality of the relationship between the deceased and the child (rather than whether the relationship has been formalised) that should determine eligibility to make a family provision claim against the deceased's estate. The Law Commission therefore recommends that the definition of a child of the family should no longer be limited to situations where the deceased was married or in a civil partnership.
Widening the meaning of "dependants"
The Act also permits claims by dependants, defined as those who were being maintained by the deceased immediately before the death. In the case law on the Act the courts have held that an applicant must show that the deceased assumed responsibility for the maintenance, and also that he or she contributed more to the relationship, in terms of financial value, than did the applicant. The Law Commission recommends that inability to demonstrate these points should no longer be an absolute bar to a family provision claim, although these factors will still be taken into account.
The reforms proposed by the Law Commission, assuming that in due course they are enacted, would clearly be helpful to the potential claimants who would be affected, namely (a) those claiming against the estates of non-domiciliaries (b) dependants and (c) those claiming as, or on behalf of, a "child of the family" of unmarried partners or of partners who have never been in civil partnership.
The proposed reform would also be significant for those against whose estates claims might be made. For example, a non-domiciliary might die leaving significant assets in the UK which currently cannot be claimed against. If the proposed reforms are enacted, then these would be subject to the court's jurisdiction under the Act. In the case of Cyganjk v Agulian (2006) a Greek Cypriot man had come to the UK and made a considerable amount of money here, amounting to some millions. He had become engaged to be married. In his will there was a legacy to his fiancee. At first instance the court had held that he was domiciled in England and Wales, which would have meant that his fiancée would have been able to make a claim under the Act for a further share of his estate. In the Court of Appeal, however, the finding on domicile was reversed meaning that the UK based fortune was unavailable to the fiancée on a family provision claim. If the proposed reform is enacted the fiancée would have been able to make a family provision claim without any need to establish that the deceased was domiciled in England and Wales.
In their succession planning non-domiciliaries need to take account of the possible future widening of the Act and the greater potential for claims against their estates.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.